NCVO will set up an independent commission to carry out a full review of the charity tax system, Sir Stuart Etherington has told the Chancellor.
Ahead of the Budget next Wednesday NCVO’s chief executive has written to the Philip Hammond urging him to work closely with the Charities Tax Forum to address immediate issues and said that NCVO will establish an independent commission to make recommendations on a long-term framework for charity tax reliefs.Read Sir Stuart Etherington's letter in full
Etherington said: “NCVO aims to establish an independent commission tasked with undertaking a full review of the current charity tax system, and developing recommendations that will establish a long term framework for charity tax reliefs.
“Such a comprehensive exercise has not been carried out since 1997 and we think that now is the time for such a review.”
The last review was carried out by the Treasury.
NCVO expects to appoint a board of people with experience in government and economics, with cross-party representation, by the summer.
Policies putting charities at risk
Etherington also called on the Treasury to assess the impact of changes in the tax system and work with the Charities Tax Forum to address problems.
He told Hammond that the rise in insurance premium tax will “disproportionately affect” the work of village halls and community centres.
Other policies like the National Living Wage, Apprenticeship Levy and business rates review are having a “cumulative impact” on charities, Etherington said.
“While they welcome the aspirations and aims of policies such as the national living wage, they are increasingly concerned about how they will maintain their viability, particularly in relation to the delivery of services under contract.
“This matter is now pressing, and we strongly suggest that Treasury officials work through the mechanism of the Charities Tax Forum to measure the cumulative impact of changes in the tax system and assess whether policy change is required in the immediate term. “
Charities can make a ‘bigger difference’
Etherington also urged the Chancellor to consider how volunteering and voluntary organisations support communities and think about how the Treasury can encourage more giving and volunteering.
“If we are to meet the challenges and opportunities facing the country, we must continue to build and strengthen this partnership between voluntary organisations and government, and build the case for volunteering and social action,” he said, and added: “There is a key role for the Treasury in developing the fiscal and spending framework that will encourage giving and volunteering, incentivise reciprocity, and enable voluntary organisations to become more involved in delivering services to the public.”