Among the ideas
in the Charity Finance Directors’ Group’s election manifesto is one for establishing a
review panel to scrutinise new legislation at an early stage and find out whether it will throw a giant spanner into the works of
the charity sector.
The benefit of this proposal is obvious: every time the Government introduced a new tax, the charity
sector would not have to fight tooth and nail to avoid shelling out huge
amounts of cash.
At present, what
seems to happen is that any new bill is already well on its way through the
Houses of Parliament before someone asks if it should apply to the charity sector,
and changing it then becomes an uphill struggle.
We witnessed this
problem last year as the battle to exempt the third sector from the community
infrastructure levy played out in the House of Lords.
The legislation, which
affects the construction of new buildings, initially contained no exemption for
charities, and would have scuppered an awful lot of charitable developments.
A group of largely
unsung charity campaigners fought what one of them described as “the bitterest
battle I’ve ever had” to win even limited exemptions.
Most of that battle
seemed to be necessary only because the Government was already well down the
line with its plans for the levy and didn’t like being forced to back down.
Lord Phillips, one
of the peers who supported charities in this campaign, emerged from it pretty
angry. “I thought there was a single concordat across the political divide that
charities were not taxed,” he said. “That concordat has been broken.”
These are fine
words. The truth is, though, that this concordat gets broken all the time. Government
tries to weasel out of it every day.
Charities pay lots
of tax, including anything up to £1 billion in VAT, as well as national
insurance, water rates, and others. And that burden threatens to increase every
time a new tax or a new piece of legislation is applied, largely because no one
thinks about the charity sector.
How much better
would it be to have a body within Government, which considered charities’ needs
early on, and wrote in an exemption for the third sector before the months of campaigning?