Former Inland Revenue chair to lead NCVO tax review group

Sir Nicholas Montagu will lead the umbrella group’s Charity Tax Commission, which will include five other commissioners and is set to review the tax system as it affects the sector

A former chairman of the Inland Revenue will lead a group set up by the National Council for Voluntary Organisations to make recommendations to government on how it might reform the charity tax system.

Sir Nicholas Montagu, who chaired the Inland Revenue between 1997 and 2004, shortly before it merged with HM Customs & Excise to become HM Revenue & Customs, will lead the NCVO’s Charity Tax Commission, the umbrella body has announced.

The commission, which was announced earlier this year, will carry out a full review of the charity tax system and the estimated £3.7bn worth of charity tax reliefs, then submit recommendations for reform to the government.

Montagu will be supported by five commissioners who have experience of the charity sector or fiscal policy.

They are: Sarah Atkinson, director of policy, planning and communications at the Charity Commission; Dan Corry, chief executive of the think tank New Philanthropy Capital; Pesh Framjee, head of not-for-profits at Crowe Clark Whitehill and a special adviser to the Charity Finance Group; Clare Pelham, chief executive of the Epilepsy Society; and Lynne Oats, professor of taxation and accounting at the University of Exeter Business School and co-director of the university’s Tax Administration Research Centre.

The Treasury and HM Revenue & Customs will also attend the commissioner as observers, and another commissioner might be announced shortly, the NCVO said.

The commission will meet for the first time later this week and should complete its work in the next 18 months, with the aim of informing the Inquiry Into the Future of Civil Society, which is chaired by Julia Unwin and is expected to report in 2019.

The tax commission is the first comprehensive review of charity tax since 1997, according to Montagu.

“My aspiration is for the commission’s proposals to inform future changes to the tax system such that it can continue to support charities’ work as effectively as possible,” he said.

“I look forward to drawing up pragmatic proposals that will appropriately balance the need for a fair and efficient tax system with the important role that we want charities to continue to play in society.”

In response to the NCVO’s announcement, Caron Bradshaw, chief executive of the CFG, said: “This commission comes at a critical time for our sector and carries a heavy weight of responsibility. We believe the commission should ensure that the proposals it puts forward deliver significant positive change for charities.

“We urge it to be brave and bold; now is not the time for tinkering. We have long argued that the tax bill for our sector is too high, and we look forward to hearing how the commission proposes this burden can be reduced.”

John Hemming, chair of the Charity Tax Group, said the commission “offers a further opportunity to challenge the anomalous tax position charities often find themselves in, particularly in respect of VAT”.

He said: “It is essential that charity tax reliefs keep up with societal and technological developments, or they may become obsolete. We look forward to working with the commission and recommend that future-proofing tax reliefs for charities be one of its major areas of focus.”

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Think tank urges wide-ranging review of charity tax reliefs

New Philanthropy Capital wants ministers to examine what happens to the £4bn of charity tax breaks the sector gets each year

The think tank New Philanthropy Capital has called for a wide-ranging review of charity tax reliefs to make them work better for the voluntary sector.

NPC has today urged the government to examine where the near £4bn generated each year in charitable tax relief and the extra resources it generates goes in the charity sector and whether it can be improved upon.

The think tank said any review should be revenue-neutral and not used to cut financial support to the sector.

The charity sector received about £4bn in tax reliefs in the 2016/17 financial year, with Gift Aid and business rates relief accounting for £1.28bn and £1.87bn respectively.

VAT reliefs are worth £400m to the charity sector and stamp duty land tax reliefs are worth approximately £220m, according to figures provided by NPC.

Individual people also get charitable tax reliefs, with inheritance tax reliefs worth £840m in 2016/17 and the higher-rate relief on Gift Aid worth £520m.

Other charitable reliefs include payroll giving, social investment tax relief and gifts of shares and property.

Dan Corry, chief executive of NPC, said: “As politicians return to Westminster, they need to look at how they can best use resources to support a strong and thriving civil society. We think that a review of the £4bn or so of tax breaks currently on offer is an important part of this process.

“NPC spends a lot of time urging individual charities to look hard at the way they allocate their resources to see if they maximise impact. It is only right that government should do the same.”

The call comes after NPC wrote an open letter to the political parties before the general election that set out the case for strengthening the charity sector, including moving the Office for Civil Society to a “cross-cutting department” such as the Cabinet Office.

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Review sector’s response to Grenfell-like emergencies, says British Red Cross chief

Mike Adamson says the response to the fire was good, but some lessons still need to be learned; however, he rules out a domestic DEC

Mike Adamson, chief executive of the British Red Cross, has called for a review of the voluntary sector response to UK-based emergencies after the Grenfell Tower fire.

Adamson said that although there was a lot to celebrate about the sector’s response, coordination could be improved and it was important to reflect on what could be learned from such events.

But he rejected calls for a domestic equivalent of the Disasters Emergency Committee. He said that the DEC’s focus was on raising money, something that had not been a problem in the wake of Grenfell or recent terrorist attacks because of the public outpouring of support.

“We need to be looking at how we frame the way in which the voluntary sector responds in a whole variety of ways in these kind of emergencies,” Adamson said. “We need to work out what is inevitable in an emergency situation and what we need to learn from and get right.”

For example, he said, the immediate aftermath of an event such as the Grenfell fire or a terrorist attack was always likely to be chaotic.

But he said responding to the fire had been much more complex even than the recent terrorist attacks, because of the need to support community recovery as well as the immediately affected victims.

A review, Adamson said, should look at “creating the mechanisms that allow coordination, fundraising and funding distribution for the medium term”.

He said: “We want to be engaging with government about what kind of arrangements we have in place for the future, for a terrorist attack or other emergency. How much do you have as a standing fund? How much do you set aside for immediately affected victims and how much do use for community recovery and development?”

Since the Grenfell fire, a number of people have called for a domestic equivalent of the DEC, a coalition of 13 charities that coordinates its members’ responses and fundraising efforts for overseas disasters.

Last month, the Charity Commission said it was in talks with a number of charities about a more coordinated response to disasters.

Adamson said the commission had been playing a helpful low-key coordination role with charities and community groups that were responding to Grenfell, but he did not believe a domestic DEC was the answer.

“The DEC raises money in partnership with the broadcasters for huge emergencies overseas affecting hundreds of thousands of people,” he said.

“There’s no shortage of money in the response here, but there are lots of different funds and what I think we need here is some improvements to the coordination of fundraising and funding distribution.”

But he said that any review and a wider debate about society’s response to Grenfell should happen in parallel with the continuing relief effort on the ground.

A commission spokeswoman said the regulator agreed there were lessons to be learned from the sector’s response to the fire and it would be working with charities to coordinate their responses in the future.

“In the short term, however, our priority is to help ensure those affected by the fire at Grenfell Tower know how to access the charitable support that is available to them,” she said. “We have supported and welcomed the collaborative approach that the key funders have taken in a complex environment.

“As the largest and most experienced charity on the ground in west London, the British Red Cross has a key role to play in making sure that happens.”

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