Charity sector bodies have called on the government to provide greater clarity on its plans to remove charitable business rates relief for private schools in England in the autumn budget next month.
The Civil Society Group (CSG), which represents over 80 infrastructure and membership organisations, wrote to chancellor Rachel Reeves ahead of her first statement of the government’s economic plans since Labour won the general election.
Signed by leaders of organisations including NCVO, the Chartered Institute of Fundraising and Charity Finance Group (CFG), the letter urges Reeves to increase charity tax limits in line with inflation and to extend charitable rate relief to trading subsidiaries.
CSG’s letter also calls for the government to continue funding HMRC’s review of gift aid, consult on the introduction of VAT relief on charitable donations and donated goods and make philanthropy training mandatory for wealth advisers.
Longer term, the letter urges the government to require and enable all public bodies to ensure that grants and contracts meet the true costs of delivering services.
It also calls for the government to appoint a “philanthropy champion” and to adequately fund the Charity Commission for England and Wales.
‘No unintended consequences’
In July, the Treasury consulted on its plans to end VAT exemptions for UK private schools from 1 January 2025 and remove the ability of those in England to claim charitable business rates relief.
This week, the Welsh Government consulted on its own proposals to withdraw charitable non-domestic rates relief from private schools in the nation from 1 April 2025.
CSG’s letter to the chancellor reads: “We ask for greater clarification on the removal of business rates relief from private schools.
“The technical note from HMRC provided limited detail on the government’s proposals, with a promise to provide greater clarity in the forthcoming budget.
“We would ask that relevant departments consult with the wider charity sector to ensure that there are no unintended consequences for charities which are not private schools, as we would seek to avoid a precedent that universal tax reliefs are removed from charity subsectors.”
‘Asks could be implemented for little cost’
Commenting on CSG’s set of proposals, CFG head of policy Richard Sagar said the government could introduce many of the group’s requests cheaply.
He said: “The chancellor has been clear that the government wants to maintain its fiscal rules and the Civil Society Group’s submission reflects her aim.
“Our short-term asks could be implemented for little cost yet could have a major impact on civil society’s ability to provide support for the most vulnerable in society.
“The sector continues to absorb an increasing amount of pressure, from rising inflation and costs, through to decreasing donations and increased demand for services.
“By supporting charities, the government can maximise the impact the sector can have on the government’s mission areas, from health and social care to housing.”
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