CFDG outlines additional help needed from government in current recession

31st March 2009

The Charity Finance Directors' Group (CFDG) have submitted their recommendations to HM Treasury for the 2009/10 Budget. This year CFDG's budget submission focuses on extra help that HM Revenue and Customs and Treasury could provide to the sector during the recession. Major recommendations focus on Gift Aid, VAT, pensions and the removal of the VAT Staff Hire Concession.

Keith Hickey, Chief Executive at CFDG said: "There is clearly real room for the government to make further reform to the Gift Aid system based on the ideas the sector put to them as part of the Gift Aid consultation in 2007. We now want to see real progress on an opt out system and whether it could work for the sector."

The budget submission also revisits VAT and specifically joint ventures and shared services. During a recession it is likely that charities will look at ways they can keep their costs down and sharing services would theoretically be a good area to look at. However, in practice, the current VAT arrangements mean that if one charity supplies a service to another charity then it must charge for its services and is required to add VAT. The charity receiving the service will only be able to recover VAT depending on its recovery rate. This is not only a real deterrent but also an example of the lack of a level playing field given that the corporate and public sector often share services as a means of keeping their costs down.

Also on the issue of VAT, CFDG calls for a two year postponement in the removal of the Staff Hire Concession.

Ernese Skinner, Policy and Campaigns Manager at CFDG said: "The removal of this concession, planned for 1st April, will have implications for many charities in the social care sector and beyond. In research we undertook with the Charity Tax Group we estimated that those charities that responded on this issue would see their VAT bill rise by on average £250,000 per annum. This is a substantial sum for any charity and could not come at a worse time."

The CFDG budget submission also makes specific reference to pensions and the need for more consideration of charities in the Pensions Protection Fund's policy formulation. CFDG has recently responded to a consultation from the Pension Protection Fund on the future development of the Pension Protection Fund Levy which omitted to make any mention of charities and contained proposals which if implemented would adversely affect charities.

- Ends -

Click here to see a copy of CFDG's budget submission.

Notes to Editor:

1. For further information please contact our Policy Team.

2.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. CFDG's circa 1,600 members are responsible for the finances of charities with a wide variety of income levels. Between them our members manage some £14.7 billion in charity income per year.

  • Email
  • Twitter
  • Facebook
  • Linkedin

© Charity Finance Group / © Charities Resource Network / Registered Office: 15-18 White Lion Street, London, N1 9PG.
A Company Limited by Guarantee. Registered in England No. 3182826, Registered Charity No. 1054914, Registered VAT No. 945 6038 09.