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Charity Tax Commission: Ensuring that the voices of foundations are heard

As you may be aware, NCVO is hosting a new Charity Tax Commission that aims to examine whether tax reliefs that charities receive each year are generating maximum public benefit and, if necessary, propose recommendations for change.

The charity tax system was last fully reviewed 20 years ago. Sir Nicholas Montagu, who is chairing the Commission, said:

It may seem self-evident that charitable tax reliefs promote socially beneficial behaviour and worthwhile causes, but we need to ask ourselves whether the current system could be improved to help charities and their beneficiaries more effectively. For example, are the right charities benefiting and should we start asking some awkward questions about whether there might to be more to show for the money if we distinguished between charities? There are all kinds of possible ways to do this - size, purpose, demonstrable impact, geographical location and a whole lot more. We welcome all ideas – no matter how bold – about how the tax system can be reformed to help create an operating environment in which charities can maximise the public benefit they generate.

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Charity Tax Commission: Terms of Reference

Purpose

The aim of the commission will be to develop a long term strategic policy approach to fiscal policy for the whole charity sector.

In order to achieve this, the commission will:

  • Examine the principles underpinning the tax treatment of charities
  • Analyse of the current tax treatment
  • Develop recommendations for reform.

The commission will principally focus on analysing the efficiency and effectiveness of the existing system of taxation and make practical recommendations based on a realignment and rebalancing of the current fiscal settlement.

Scope

The commission’s work will seek to answer four interrelated questions:

  • What are the principles that should underpin the tax treatment of charities?
  • Does the current tax treatment of charities reflect these principles?
  • How does the current tax treatment of charities generate public benefit?
  • How could the current tax treatment of charities be changed so as better to generate public benefit and reflect the principles identified?

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We are keen that the voices of our members, both as charities themselves and as major supporters of others, are heard in this process and directly inform ACF’s position. The commission’s call for evidence is open until Friday 6 July. ACF will submit a response, and our chief executive Carol Mack is a member of the reference group to the commission. The commission’s final recommendations will be put to the government in spring 2019.

As well as hearing your views on charity tax between now and the 6th July, we would like to share and discuss our draft submission with members at a meeting on Friday 29th June at ACF from 11am-1pm.

To contribute your views, and to register to attend this event, please get in touch with Max Rutherford, Head of Policy at max@acf.org.uk.

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