Tax reliefs for charities
Charities in the UK and Europe continue to be hampered by a taxation system which places them at a disadvantage to non-charitable organisations, weakening their ability to fulfil the charitable purposes for which they were established.
The situation was even worse when CLC began working in this area in 1984.
What we did
For the last 28 years, CLC has been at the heart of the lobbying effort on behalf of charities in this area, focusing both on the UK Government and European Commission. A range of tax reliefs have been introduced as a result, and CLC has also campaigned successfully to protect existing concessions.
The concessions that have been secured since 1984 are now worth (conservatively) over £300 million a year to the charity sector, cumulatively totalling over £2.4 billion.
This work is ongoing. CLC continues to be involved in ensuring that the emerging regulatory environment covering the provision of public services by the voluntary and community sector is not hampered by conflicting tax regimes. We also continue to lobby for the Government to address one of the major outstanding fiscal problems affecting charities: the VAT they incur when they spend the money that is generously donated to them. This irrecoverable VAT bill currently amounts to over £500 million a year.
Community Infrastructure Levy (CIL)
Over a long period the Labour Government sought to devise a system under which part of the rise in the value of a piece of land resulting from the granting of planning permission for development would be captured by local government in order to fund expansion and improvements to infrastructure facilities such as roads and sewerage that became necessary as a result of that development. The problem was that nowhere in the discussions over what was originally designated as 'Planning Gain Supplement' did Ministers give any serious consideration to the ability of charities to pay the proposed levy.
What we did
From the time when the Planning Gain Supplement proposal was first mooted we argued for an exemption for charities that develop land in pursuit of their charitable purposes. W were instrumental in building a strong coalition of umbrella-groups from across the sector, and we took part in several briefing sessions with civil servants. During the passage of the Planning Act 2008 (by which time Planning Gain Supplement had been transmuted into Community Infrastructure Levy) we drafted amendments to the Planning Bill and took part in several briefings with civil servants and the Minister in charge of the Bill in the House of Lords.
The Labour Government conceded special treatment for the sector, and section 210 of the Act provides that the regulations must exempt charities from liability to pay CIL where the building "is to be used wholly or mainly for a charitable purpose of the charity". After re-examining CIL in advance of its implementation, the Coalition Government concluded that it would retain both CIL and the charity exemption.
Free entry to national museums
Free entry to the national museums and galleries was proposed by the Labour Party while in opposition. However, a legislative anomaly meant that museums pursuing a policy of free admission - in line with government policy once Labour came to power in 1997 - had been penalised with a hefty VAT bill (£1 million in an average year for the British Museum alone), while museums adopting a charging policy had been granted 'business' status and enjoyed full VAT recovery.
This problem had forced some of the national museums, such as the V&A, to introduce charges against their will.
What we did
CLC devised the technical solution to enable the Treasury to introduce VAT measures, which involved bringing national museums and galleries within the scope of Section 33 of the 1994 VAT Act. CLC was subsequently heavily involved in lobbying for the introduction of this measure.
The Government announced in the 2001 Budget that the national museums and galleries would be able to drop their admission charges without losing their ability to reclaim VAT. Museums and galleries which previously charged have seen a 75% increase in visitor numbers since then.