The Charity Tax Group (CTG) has teamed up with the Nuffield Foundation to produce the Charity Tax Map, a study of the impact of taxation on the sector.

Funded by the Nuffield Foundation, the study reveals that charities are subject to 18 different taxes and that, based on a sample of 31 organisations, charities spend an average of four pence in every £1 on tax.

It also includes case studies demonstrating how the taxes affect charities and guidance for when charities should seek professional advice.

CTG now hopes to develop and repeat the survey to gather more targeted information from a larger sample.

John Hemming, chair of CTG, said: “The Charity Tax Map navigates charities to the reliefs to which they are entitled. It will also ensure that they are fully aware of all the tax responsibilities their charity faces.

“By revealing the full extent of the tax burden on charities, we hope that the government will take steps to simplify parts of the tax system and its processes”.

Professor Cathy Pharoah (pictured), co-director of the Centre for Charitable Giving and Philanthropy at Cass Business School, supervised the analysis of the findings.

She said: “The research has shown how very difficult it is for charities to compile an accurate picture of tax and compliance costs.

“Data gathered so far indicates a range of cost that is mainly related to what charities do and not to their structure. It seems unfair that some causes should have to struggle with this more than others”.

HMRC wants to reduce paper

Speaking at the launch event last night, Dave Hartnett, permanent secretary for tax at HMRC praised the book, saying: “It is going to be an extraordinary reference document for charities and for policy makers.”

Asked by Charity Finance guest editor Andrew Hind what issue he would like to see HMRC’s new Charity Tax Forum tackle first, Hartnett added: “I’d like to drive down compliance costs for the sector and I’d like to do that by taking paper out of the compliance requirements for the sector.”