# Accountancy firm calls for tax reforms to help charities with cost-of-living crisis

- Link: https://fundraising.co.uk/2022/09/16/accountancy-firm-calls-for-tax-reforms-to-help-charities-with-cost-of-living-crisis/
- Published: 2022-09-16T13:12:35+01:00
- Author: Melanie May

**With pressures mounting for UK charities as the cost-of-living crisis escalates,
accountancy firm HW Fisher is calling on the government to bring in tax reforms 
to help.**

The suggestions are:

 1. **Increase gift aid – **To combat the decline in donations, the government could
    raise gift aid to 30% for a set period of time. This would be particularly beneficial
    for public services that the government already relies on – including charities
    that support the NHS and food banks.
 2. **Bring in a Domestic Reverse Charge **– Charities could self-account for VAT at
    5% if they are VAT registered. If not, a rebate scheme could be introduced, similar
    to a scheme that is already set up for listed places of worship.
 3. **Introduce an energy cap – **Currently energy caps only apply to domestic households.
    The government could defend the energy bills of charities by extending this cap
    to charity owned facilities and buildings.
 4. **Raise tax-free mileage for charity workers **– Petrol prices are at an all time
    high and the current tax-free mileage rate needs to be adjusted in line with inflation

Recent [CAF research](https://www.cafonline.org/about-us/media-office-news/increased-demand-and-falling-donations-create-perfect-storm-for-charities#:~:text=At%20the%20same%20time%2C%20nearly,their%20organisation%20struggling%20to%20survive.)
revealed widespread concerns among charity leaders, with 59% concerned about people
having less money to donate to their cause, and 71% worried about managing an increase
in demand on their services. 82% of charity leaders are also concerned about the
increased cost of utilities and 35% about their organisation struggling to survive.

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Russell Nathan, Senior Partner at UK accountancy firm HW Fisher, said:

> **“**At what is already a difficult time for charities, they also face a number
> of outdated, overlooked and in some cases unclear UK tax policies. This includes
> stealth taxes, unfair VAT clauses in government contracts, distortion of competition
> against local authorities and the lack of a Brexit dividend.”
>  
> “The Government must learn the lessons of previous recessions. The financial crash
> in 2008 and the subsequent recession had a significant impact on charitable donations,
> and the aftermath of the Covid pandemic will be the same. We also know that not
> all charities will be affected equally, and so it is important for the Government
> to introduce measures that will support all charities operating in the UK.
>  
> “We understand that not all of these changes can happen at once – but small changes
> can have the potential to make a big difference. In many cases, a simple review
> of policies that are already in place and adjusting them to better reflect today’s
> economic environment would have a significant impact for charities that are struggling.”

 * **[Consultation opens on charities tax compliance](https://fundraising.co.uk/2023/04/28/consultation-opens-on-charities-tax-compliance/)**(
   28 April 2023)
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   28 July 2023)
 * **[CAF urges people to remember to claim Gift Aid relief as Self-Assessment deadline looms](https://fundraising.co.uk/2024/01/16/caf-urges-people-to-remember-to-claim-gift-aid-relief-as-self-assessment-deadline-looms/)**(
   16 January 2024)