Despite positive predictions for the year ahead, Gordon Brown did not widen tax relief to charities also struggling under piles of red tape.
Les Jones, deputy chairman of Charity Finance Directors’ Group, said: ‘The chancellor imposed an annual £400m burden on the charity sector by abolishing advance corporation tax in 1997. It is extremely disappointing that in view of the government’s finances and the chancellor’s generosity in other areas, he has chosen not to exempt charities from this punitive tax.’
Brown’s announcement of simplifications to VAT rules and tax relief on property conversions were however welcomed by CFDG.
Stephen Burgess, charities consultant at Saffery Champness and adviser to CFDG, said: ‘We are particularly pleased the chancellor has found a way to override the normal VAT rules through lower rates and a grant back mechanism for which charities have been calling for many years. We hope this will soon be extended to eliminating the half billion pounds VAT burden which they suffer every year.’
Although CFDG praised the tax incentives for savers, it said they were disappointed the relief was not extended to charities as well.
CFDG also welcomed the chancellor’s decision not to reduce the basic rate of income tax, which would have reduced tax reclaims by charities on gift aid donations. But, Burgess demanded more simplification in this area.
‘The tax incentives for giving introduced in the 2000 budget have not increased donations by the levels we hoped and more advertising and simplification is urgently needed,’ said Burgess.
CFDG represents over 60% of the top 500 charities managing some £8bn in charity funds.
Taxman lines up early exit from doomed Concentrix tax credits deal, as HMRC faces intense scrutiny from MPs
Crowe Clark Whitehill , the top 20 accountancy firm, has announced the promotion of Chris Mould to partner
The latest opinions from Accountancy Age on Making Tax Digital, and outline plans to evolve the UK's corporate governance regime
Five million taxpayers are ow using digital personal tax accounts (PTA) as part of the making tax digital strategy, HMRC said