VAT costs the sector £400m a year and in ignoring the impact the Charity Finance Directors Group and its members ‘feel very let down’.
‘Many of our members were very disappointed that there were no proposals relating to the problems associated with irrecoverable VAT,’ said the CFDG in its response to the consultation paper Private action, public benefit.
One of the major recommendations for legislation is that larger charities – those with a turnover of at least £1m – should complete an annual standard information return. This would highlight information about the charity, focusing on how it sets objectives and then measure its outcomes against them.
But the proposal, in its current form, is unworkable, according to the CFDG.
‘Although CFDG has supported the introduction of a SIR, it is concerned that it could be damaging. Finance directors must play a key role in developing [it]’.
A bill is expected to be published by September.
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Unincorporated businesses under the VAT threshold given an extra year to prepare before MTD becomes mandatory