Budget Offers Little to Charities in Difficult Times

9th April 2003

Les Jones OBE, CFDG Vice Chairman and Deputy Chief Executive of the WWF responded on behalf of the Charity Finance Directors' Group to today's Budget.

"Although the Chancellor may be optimistic about the prospects for the economy, we are not as optimistic about the financial environment for charities. The charity sector is facing a difficult fundraising environment and falling reserves, at a time when the stock market has fallen by about 50% since 2000. If house prices fall, legacy income is likely to be hit hard unless we see dramatic increases in the stock market.

We are disappointed that the Chancellor has not announced the extension of the compensation charities receive due to the loss of Advance Corporation Tax Credit. Recent research by investment analysts WM reveals that by 2004, charities will have lost more than £300 million due to the abolition of this relief.

We are also disappointed that the Chancellor has not announced any concessions for charities in relation to the increases in National Insurance or the continuing issue of irrecoverable VAT. In relation to VAT and the National Insurance increases, 125 MPs from all parties have now signed a parliamentary petition (EDM 552) calling on the Government to take action to introduce measures to "reduce or remove this crippling financial burden on charities". We live in hope that the Chancellor will eventually see the merit in action on irrecoverable VAT."

 

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