Sir Nicholas Montagu, former to chair of the Inland Revenue, will lead an independent commission set up to review the charity tax system, NCVO announced today.
Montagu, chaired the Inland Revenue between 1997 and 2004, was announced as chair of NCVO’s Charity Tax Commission today ahead of the group’s first meeting on Thursday, at which point it will confirm its full terms of reference.
NCVO announced plans to establish a commission to review charity tax reliefs in March.
The other committee members are Sarah Atkinson, Charity Commission director of policy and communications; Pesh Framjee, head of not for profits at Crowe Clark Whitehill; Lynne Oats, professor of taxation and accounting at University of Exeter Business School; Dan Corry, chief executive of New Philanthropy Capital; and Clare Pelham, chief executive of Epilepsy Society.
The Treasury and HMRC will join the commission as observers. One further commissioner may be confirmed shortly.
In its announcement, NCVO said the commissioners had been appointed by virtue of their expertise in fiscal policy and experience of the charity sector.
'Sector has evolved dramatically'
At the moment tax reliefs for the charity sector amount to around £3.7bn but the last time charity taxation was reviewed was 20 years ago and NCVO said there has since been a shift in "the way charities operate and the role they play in society".
The findings and recommendations of the commission, which aims to complete its work within 18 months, will help inform the Civil Society Futures inquiry, which is due to conclude in 2019.
Montagu said: “The government’s last comprehensive review of the charity tax system was in 1997. Since then, the charity sector and the environment in which it operates have evolved dramatically.
“Charities have come to play a much bigger role, for example in public service delivery, and they operate on new and different business models.
“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.
“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.”
CTG and CFG reaction
Charity Tax Group chair John Hemming said the review “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.”
Caron Bradshaw, chief executive of Charity Finance Group, said: “This commission comes at a critical time for our sector and carries a heavy weight of responsibility. We believe that the commission should ensure that the proposals it puts forward deliver significant positive change for charities.
“We urge them 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."
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