19th October 2018

It has been over 20 years since charity taxation and reliefs last came under scrutiny in the United Kingdom, but the initial stages of a comprehensive review by The Charity Commission has recently concluded.

The ‘call for evidence’, which sought the views and evidence of anybody with knowledge, expertise and insight into UK charitable reliefs, can be accessed here.

Tax reliefs including gift aid, rate and VAT relief within the charity sector are estimated to be worth about £3.77bn per year, with relief for individuals (primarily gift aid) running at around £1.47bn.

With local authority spending under intense pressure and scrutiny, the possibility of the charity sector plugging this gap in some capacity is being explored. Whether this is acceptable, or realistic, is of interest to the Commission so that they can assess if there are any changes to the tax system that could support charities to achieve their long-term goals and objectives.

The review is led by Sir Nicholas Montagu, former Chairman of the Inland Revenue, alongside a board of six experienced commissioners.

When all the evidence has been collated, it will be very interesting to see if this review leads to significant changes to charitable tax reliefs in this country.

For more information regarding UNW’s charity taxation services, please visit the UNW tax page or you contact David Ward, Tax Partner, at davidward@unw.co.uk or on 0191 243 6081.

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