CFDG and ACEVO push for major reforms in the Budget

23rd February 2007

Charity Finance Directors' Group (CFDG) and acevo have submitted a document to HM Treasury detailing what they want to see in the Budget this year. The submission makes a total of 15 demands on issues ranging from VAT to payroll giving.

CFDG and ACEVO's top three demands are on irrecoverable VAT, Trading and Gift Aid. The charity finance experts and chief executives would like to see the abolition of irrecoverable VAT, which is not only costing the sector circa £500 million a year but is also part of an incredibly complex and bureaucratic tax system for charities to navigate.

Nick Aldridge, ACEVO's Director of Strategy said "Charities' annual VAT bill of £500m should no longer be diverted from charitable activity to the Exchequer. The present system is extremely complex and fundamentally unfair. It is in need of urgent reform."

CFDG and ACEVO are calling for a review of current legislation on charity trading. Ernese Skinner, policy and campaigns officer at CFDG said "Money is being leeched from charities to consultants and advisers to ensure proper compliance with legislation which is inconsistent, difficult for charities to get right and resource intensive. We want to see charities able to undertake all of their trading within the charity without need for a separate trading subsidiary." This proposal was first put forward in Private Action, Public Benefit: A review of charities and the not for profit sector published in 2002, and was the only proposal not accepted in the government's response. CFDG would also like to see the small charities trading exemption raised from £50,000 to £250,000.

On Gift Aid, CFDG and ACEVO want to see all income donated by an individual to a charity gift aided unless expressly stated otherwise. Keith Hickey, CEO at CFDG said " We welcome the steps the government has made in the last six years to increase the opportunities for Gift Aid but if the government is truly serious about getting people giving then all donations should be gift aided to increase levels of take up and provide a not inconsiderable addition to the voluntary organisations' income".

Download a copy of the Joint Budget Submission.

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