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Charities frustrated by HMRC decision to ‘pull the plug’ on registration project

24 Sep 2018 News

HMRC building

Fergus Burnett

Charites have expressed concern after plans to build a joint registration portal between HMRC and the Charity Commission were shelved after five years of inaction. 

At the moment charities with income over £5,000 have to register with the Commission and again with HMRC to be able to claim Gift Aid and other tax relief. Plans for joint registration were announced in 2013 but had already been delayed a number of times.  

Last week Civil Society News reported that the plans had now been abandoned, without meaningful consultation with the sector. 

HMRC initially said the relationship between the bodies had now improved so much that the creation of the portal is unnecessary, but has since blamed Brexit. It also said that the nine-year lag between registering with the Commission and HMRC meant it was “unlikely to benefit the majority of charities”.

Charities have said they are disappointed by the move because a joint portal would have helped to reduce the burden on charities. 

But Charity Commission has said it is confident that the sector will not be harmed by the decision.

Charities ‘disappointed’

Plans for the portal were announced in 2013 to improve communication between HMRC and the Commission, to help to catch criminals, and reduce the burden on charities - something the sector had been calling for.   

Caron Bradshaw, chief executive of the Charity Finance Group, said: “It’s great that there is better cooperation between the HMRC and the Charity Commission. However what we really need to see is a customer-first approach which puts the experience of the charities first. “ 

Earlier this year the government warned that charities were missing out on £600m from Gift Aid because donors had not ticked the correct box, prompting a public campaign. CFG also announced that it would organise an awareness day on 4 October.  

Bradshaw added that charities need more support to benefit from reliefs like Gift Aid but “instead, we’ve seen the plug pulled on what was a welcome initiative to make life easier for charities, save on administration and unlock more money to support the needs of beneficiaries”.

Douglas Dowell, senior policy officer at NCVO, agreed that a joint portal “would rather reduce the burden on charities”. 

He said NCVO is “disappointed that it is not being taken forward now” and called for more work on simplifying registration.

Dowell also said there was a “wider context” to consider.

“The Commission is thinking about charging some charities for regulation so it is especially important that there is a strong focus on accessibility for charities,” he said.

‘Limited return on investment’ 

The Charity Commission said that it was confident that the decision will not have a negative impact. 

Stuart Wood, head of registration at the Charity Commission, said: “We are confident that the decision to end the project to develop a joint portal between HMRC and the Charity Commission will not be to the detriment of charities.

“Both the sector and the work of the Commission have moved on considerably since the recommendations were first made. Among the most important changes are the introduction of CIOs and the improvement of information sharing between HMRC and the Commission. 

It’s also important to note that there is, on average, a nine year gap between charities registering with the Commission and applying for Gift Aid – this fact points to limited demand for a joint portal, and thus to limited return on what would be considerable investment of tax-payers’ money.”

HMRC focused on Brexit 

HMRC said that the portal was shelved as part of a “reprioritisation exercise” so that it can work on Brexit. 

A spokesman said: “HMRC has carefully considered the scale and pace of its transformation to ensure that it can deliver work to support EU Exit. We’ve been open with MPs and stakeholders about the impact of these changes. 

“Following this reprioritisation exercise, at the June meeting of the Charity Tax Forum, consisting of representatives of the charity sector, HMRC advised that plans to develop a joint portal for the registration of charities with HMRC and the Charity Commission for England and Wales (CCEW), announced in 2013, would no longer be taken forward.”

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