Tax

Tax reliefs for UK charities in need of ‘urgent overhaul’, report finds

Tax reliefs offered to UK charities “urgently need an overhaul”, according to a new report from the independent Charity Tax Commission (CTC).

The National Council for Voluntary Organisations (NCVO) established the CTC in October 2017 to undertake a full review of the impact of the tax system on charities. Proposals in the report claim changes to the system could “ensure giving is made easier”, while charities spend less time on “unnecessary admin”.

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Nicholas Montagu, chairman of the CTC, said that changes to the rules surrounding Gift Aid – where the taxman adds 25p to every pound given – and other reforms could also “incentivise” giving and offer financial protection to UK charities.He said it has been 20 years since charity tax reliefs were last reviewed, and added many of the rules were written for an “analogue era”.

Nicholas said: “With people giving by text message and contactless payment, and with many donors themselves increasingly mobile, we need a system fit for the digital age if we are not to see the UK’s natural generosity held back.

“The Charity Tax Commission’s recommendations could help bring the tax treatment for charitable giving into the 21st Century and result in a huge increase in the amount of money available for good causes.”

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