The Charity Finance Group (CFG) has called on the Government to set aside or rework several key taxes ahead of the Autumn Budget in November.
In an official letter, the group has urged the Chancellor to create a joint Government-charity sector working party to consider how irrecoverable VAT can be eliminated post-Brexit in a way that is “fair and fiscally deliverable”.
Irrecoverable VAT – the gap between what charities pay and what they receive – is estimated to be £1.5 billion.
The CFG said Brexit means that “it is likely that charities are going to need to do more to support beneficiaries, despite increased cost pressures”, as charities currently receive around £300 million per annum from the EU.
The CFG also asked the Government to commit to eliminating Insurance Premium Tax (IPT) for charities either immediately or through stages via a “special rate”.
Meanwhile, business rate relief for charities should be increased, with the goal of creating 100 per cent relief for charities by the end of the decade, it added.
“These proposals … offer the Government three actions that they can undertake immediately to help strengthen the sector ahead of Brexit and ensure that they can meet the growing and changing needs of the people and communities they support,” said the CFG.
The Autumn Budget will take place on 22 November.
For more information about Milsted Langdon’s services for charities, please contact us.