The Budget failed to provide any key reforms of funding or tax relief for the voluntary sector, charity leaders said today – but opinions were divided about whether this was a good or bad thing.
Charities have lobbied in recent years for substantial reform of both the gift aid system and VAT relief, and have also called for more sustainable funding for the sector.
Charities currently pay up to £1.3bn a year in VAT, and have consistently called for relief on these payments, particularly for organisations delivering statutory services on behalf of government. These organisations are often delivering the same or very similar services to those carried out by NHS.
“It’s a shame that there was nothing in the budget to address irrecoverable VAT or gift aid reform,” said Caron Bradshaw, chief executive of the Charity Finance Group. “We’re disappointed that government didn’t take the opportunity to start some of these incredibly important and necessary conversations.”
Neil Cleeveley, chief executive of Navca, said: “The budget offers nothing to help charities supporting people living in poverty. We have foodbanks in every part of this country and £12bn of welfare cuts will make this situation worse. These cuts are ideologically driven and punish the poor for the mistakes of the bankers.”
“We welcome devolution plans but believe existing cuts to local government has hampered the ability of councils to support the most vulnerable communities. This is setting charities against councils at a time they need to work together to support local people.”
But Karl Wilding, director of public policy at NCVO, said the lack of sector-specific policies was potentially a positive.
“This was a low key event for charities in terms of reliefs or taxes about charity,” he said. “That is probably not a bad thing.
“For many organisations the devil will be in the detail of the welfare cuts and allowances.”
John Hemming, chairof the Charity Tax Group, said: "While there were no headline announcements relating to gift aid, we understand from Treasury officials that government is committed to the reform of the donor benefit rules and declaration that began during the last Parliament.
"Further increases to the personal tax allowance will reduce the number of people paying sufficient tax to make an eligible gift aid claim, which makes improving understanding of the system more important than ever.”
