CFDG expresses support for Trading reform to the Committee on the Charities Bill

23rd June 2004

The Charity Finance Directors' Group (CFDG) today gave evidence to the Parliamentary Scrutiny Committee on the Charities Bill. Whilst CFDG welcomes most of the provisions, it expressed regret that proposals contained in Private Action, Public Benefit to relax the laws on charities trading were not included in the Bill.

CFDG members voiced great support for the proposals to enable charities to trade without necessarily setting up a separate trading company. Although they recognised that the changes would be controversial, it was felt that the reduction in red tape would be of significant benefit to their charities. Having to operate trading activities under a separate company causes a number of administrative and financial difficulties. Trading subsidiaries find it almost impossible to build up capital and many operate almost permanently on the verge of bankruptcy. CFDG also refutes the suggestion that the proposals originally contained in Private Action, Public Benefit would pose a threat to small businesses.

CFDG Deputy Chairman Helen Verney, who spoke to the committee, said, "We feel that the Government could be wasting a valuable opportunity here to reduce a regulatory burden that is unnecessary and wasting the precious resources of many charities. We appreciate the argument that small businesses see trading as competition, but the reality is that charities that want to trade already do so through a subsidiary and avoid paying tax by transferring profits to the charity. We see no reason why competition to small businesses would increase if charities were allowed to trade through the charity."

Notes to Editor:

1. The Charity Finance Directors' Group was set up in 1987 and is an umbrella group that specialises in helping charities to manage their finance-related functions.

2. CFDG's 900 plus members are responsible for the finances of charities with a wide variety of income levels. Over 60% of the top 500 charities are members of the CFDG. Between them our members manage some £10 Billion in charity income per year.


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