The Civil Society Group – comprising almost 90 organisations that support the UK charity and voluntary sector – has written to the Chancellor with a number of proposals on behalf of the sector ahead of March’s Spring Budget.
They include support with Gift Aid if there is a reduction to the basic rate of income tax, and protecting fiscal incentives for charitable bequests.
The group’s submission, written by the Charity Finance Group (CFG), which is a member, sets out four main policy asks, which if implemented, the group believes would support and protect the immediate and longer-term financial health of the charitable sector and protect the UK’s most vulnerable and disadvantaged communities from gaps in service provision.
The letter states that for many charitable organisations, there has been little or no improvement to the operating environment since the Autumn Statement.
It says that if brought in by the government, the group’s key asks would be of ‘significant benefit to our wider society, as the support for charitable organisations helps them respond to need and increase their impact in the public interest’.
The asks are for the government to:
- Streamline and review the charity tax system by: putting in place an automatic transitional relief for at least three years for Gift Aid if there is a reduction to the basic rate of income tax; commit to protecting the fiscal incentives for charitable bequests; address the issue of irrecoverable VAT; and extend charitable rate relief to wholly owned charity trading subsidiaries.
- Introduce an Essential Guarantee that would ensure that, at a minimum, Universal Credit protects people from going without essentials. With this in mind, it says, the cap on total deductions from the Standard Allowance of Universal Credit should be lowered from 25% to 15%.
- Enable public bodies to ensure grants and contracts meet the true costs of delivering public services by increasing long-term funding to all public bodies so that they can cover these costs; requiring grants and contracts, where relevant, are uplifted to meet the costs of paying the national minimum wage; and consider how best to ensure national oversight of the state of the public services market and providers’ ability to deliver.
- Meet its Levelling Up commitments by extending the Levelling Up funding, including UKSPF, to 2030 to match the Levelling Up mission’s timetable.
Commenting on the submission, Richard Sagar, Head of Policy at CFG, said:
“Charitable and voluntary sector organisations continue to work harder than ever to support their communities, particularly those that remain hardest hit by ongoing economic pressures. At the same time, we have seen very few real improvements in the sector’s operating environment; very little has changed economically or politically since Chancellor Jeremy Hunt presented his autumn statement in November 2023.
“Many organisations that are doing important and often vital work are finding it increasingly difficult to meet demand for their services. The Civil Society Group is calling upon the government to do more to ensure the most vulnerable and disadvantaged people are better protected, and that charities can continue to provide their critical services.”