Tax Bombshell to hit charities

Stealth tax will impact on 1st April 2009

The Government, in an attempt to fill the hole in the public finances, is making two major changes that will hit charities hard, and appears to be refusing to budge on the substantial donors legislation.

On 1st April 2009, the concession by which charities can avoid VAT on the provision to them of temporary staff will be abolished.

In 2011, it is proposed to increase NIC by half a percent for both employees and employers, but there will be no concessions for charities.

The Government does not appear to be considering repealing the substantial donors legislation, which is preventing many charities from accepting perfectly legitimate donations from reputable sources.