The Tax Treatment of Charities- Have Your Say

21st March, 2018

The Charity Tax Commission has launched a consultation seeking views on whether and how the tax treatment of charities needs to be reformed.

Tax relief for charities are estimated to be worth £3.77bn a year, including; business rates relief, gift relief and VAT relief, while reliefs for individuals are worth £1.47bn.

The aim of the commission is to ensure that the tax system and the reliefs it offers are still operating in a way that generates the maximum public benefit. Britain’s departure from the EU also opens up potential opportunities to review a number of issues related to the tax treatment of charities.

The review, the first systematic look at charity tax reliefs in over 20 years, will examine the role charities play in society, and seek to identify ways to improve the efficiency and efficacy of the current system.

The commission’s 16-week call for evidence, invites submissions from anyone with relevant knowledge, expertise or experience of the system of charitable tax reliefs in the UK, including charities, donors, academics, think tanks, representative bodies, accountants, philanthropy and financial advisers and tax professionals.

The commission will look at the full range of taxes and tax reliefs that charities and donors are subject to and benefit from – including business rates relief, social investment tax relief, gift aid, VAT exemption and inheritance tax relief. In particular, the commissioners are interested in receiving views on the extent to which current system directs the activities of charities and encourages certain behaviour.

Against a backdrop of increased scrutiny of how charities spend public money, the commission is also seeking views on ways to increase transparency without significantly increasing the administrative burden on charities.

The call for evidence will close on Friday 6 July. Alongside the consultation, the commission will also be holding a series of public evidence-gathering meetings across the UK during the consultation period.

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