Pensions reform, VAT rules, a gift aid database and trading limits all featured in CFG’s submission to the Treasury ahead of this year’s Budget.
In its written representation, CFG said the recent Wedgwood Museum case highlighted the “inequitable nature of the employer debt regulations” and said the ‘last man standing’ rule is having a “major impact on the long-term health and viability of many charities”.
It said: “At a time when their finances are being squeezed from all angles, the existing regulation mean that charities are being further penalised – trapped by a pension scheme from which they cannot escape and are effectively prohibited from restructuring, merger, engaging in joint ventures, making redundancies or looking to take on additional public services as a means of adapting to a tougher economic climate.”
CFG requested that the Chancellor announce in his 21 March Budget that the government would consult on the pensions issue “within the year”.
VAT and gift aid
On irrecoverable VAT, the umbrella body acknowledged the government’s reluctance to forego the £400-£500m it takes from the sector each year in this period of limited resources, but asks that it “remain high on the agenda and seen as something for long-term review”.
Regarding VAT on shared services, CFG asked for a commitment in the Budget that it will “explore sector-specific alternatives to the VAT cost-sharing exemption which can be adopted by all charities wanting to share services”.
And on gift aid, it reiterated previous requests for a simple database that would enable organisations to log and record gift aid declarations more efficiently.
Trading and payroll giving
In addition, it implored the government to increase the limit for non-primary purpose trading from £50,000 to £250,000, saying that this would significantly reduce cost and bureaucracy for many organisations.
And it requested reform of payroll giving, more support to help charities avail themselves of social investment, a review of the iXBRL online filing requirements and the inclusion of the issue of pensions provision in changes to the Tupe Regulations.