Charities call for the same tax concessions as businesses, ahead of Budget

09 Feb 2017 News

Philip Hammond, Chancellor

A coalition of nine charity infrastructure bodies has written to the Chancellor Philip Hammond calling for a range of measures to match tax concessions being giving to the private sector.

One of these is increasing business rates relief to 100 per cent. The letter, which was coordinated by the Charity Finance Group (CFG) ahead of next month's Budget, says that businesses have benefited from a £6.7bn rates cut which will see some businesses paying no rates at all.

This means that those businesses will effectively be subsidised by charities which do pay.

The letter also calls for an increase in the amount of national insurance contributions that charities can claim back from the government from £3,000 per organisation per year to £7,000.

It argues that while businesses have been given corporation tax cuts in order to offset the cost of the new national living wage, charities will have no such support.

Elsewhere, the letter calls for a reduction in irrecoverable VAT, which currently costs the sector £1.5bn, and lowering the insurance premium tax for charities from 12 per cent to 6 per cent.

It also calls for government funding such as that from Libor fines to be distributed strategically rather than in the form of individual charity giveaways, and for the Charity Commission to receive increased funding.

Value to the economy

The letter emphasises that civil society contributes £12.2bn gross value added per year to the economy, which is equivalent to the UK’s agriculture sector.

It also highlights that the sector employs 827,000 people, and raises £11bn in voluntary income which supplements and supports statutory activity.

Speaking separately, CFG’s chief executive Caron Bradshaw said: “While government continues to believe that private business is the sole driver of economic growth and produces a tax system to match, it ignores the net contribution that charities make to UK PLC, which threatens the whole sector and especially small specialist and local charities that are the bedrock of our society.”

The letter is signed by leaders from CFG, Navca, Children England, Locality, the Association of Charitable Foundations, Voice4Change England, the Small Charities Coalition, Social Enterprise UK and the Institute of Fundraising.


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