Rationale for a review of charitable tax reliefs
Tax reliefs for charities are estimated to be worth £3.77bn a year, the main ones being business rates relief, Gift Aid and VAT relief, while reliefs for individuals are worth £1.47bn. The last comprehensive review of charity taxation and reliefs took place over 20 years ago. Since then, the voluntary sector and the environment in which it operates have changed significantly. The sector has grown in scale and charities now do far more, including playing a bigger role in the delivery of public services. Britain’s departure from the EU also presents potential opportunities to review a number of issues related to the tax treatment of charities.
Against this backdrop and ongoing pressures on local authority spending and other funding streams for the voluntary sector, we believe it is a good time to do an in-depth assessment of how the tax system functions in relation to charities and what – if any – changes could help position them better to fulfil their long term strategic role in society.
About this call for evidence
This call for evidence from NCVO seeks views and evidence 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, tax professionals and members of the public.
In particular, they are keen to receive thoughts about the effectiveness of current reliefs, which are summarised in the consultation document (Word, 55KB), and whether the existing system could be improved in order for charities to better serve their beneficiaries. NCVO welcome all ideas about how the tax system can help to create an operating environment in which charities can maximise the public benefit they generate.