Financial Secretary's speech to the Charity Finance Group
People expect the tax system to make sure their money to charity goes as far as possible, says Financial Secretary to the Treasury.
Introduction
Good afternoon.
I’m sure I won’t be the first – or the last – speaker at this conference to talk about Stephen Sutton…
Who sadly succumbed to bowel cancer yesterday.
And – with no disrespect intended to any of the other speakers – if I want you to look back in a month or a year’s time…
And remember one speech from today…
I want that to be because you went home after this conference and watch Stephen’s address to the St James’ Place AGM on youtube.
Now, in that speech, which I can’t recommend highly enough…
Stephen tells his story…
From his childhood…
Through his diagnosis…
And into his – if you will – campaign…
And the part of it that has stuck with me most is when he says… and I quote…
I do not know how long I’ve got left to live…
But one of the reasons for that is because I haven’t asked.
And that’s because I don’t see the point in measuring life in terms of time anymore…
I would rather measure it in terms of what I actually achieve.
I’d rather measure it in terms of making a difference…
Which I think is a much more valid and pragmatic measure.
And I’m sure that anybody that has seen the papers this morning…
And read about everything he did achieve…
And the difference he did make…
Would agree that – in his nineteen years…
Stephen touched more lives, and bought more hope and more joy to more people than many of us will in a lifetime.
He attempted a world record.
He trended on twitter.
He skydived.
He drummed at the Champions League final.
And perhaps most famously – and some would say most importantly – he raised over £3 million for the Teenage Cancer Trust.
And the reason I wanted to talk about Stephen is this:
I’m sure that he – having given up all those hours to do all that fundraising…
And I’m sure that everyone who was touched by his story, and inspired to give up their time or their money to charity…
Would expect those charities to make sure their money went as far as possible.
And they would certainly expect the tax system to make sure their money went as far as possible.
And it’s the latter of those that – as a Treasury Minister – I want to talk to you about today.
Of course, I recognise that in an ideal world…
Wherever possible, charities wouldn’t pay any taxes on income or expenditure.
But realistically that isn’t possible…
And – as such I want to use my time at the Treasury…
To ensure that we all use the tax system as well as we can…
Both to reduce the burden for charities…
And to increase incentives for givers.
I’d like to believe that we are making sure that happens.
Tax reliefs for the sector were worth over £4.4 billion last year…
Gift Aid alone was worth over £1bn…
But I’d like to spend my time with you this morning to:
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first – look back on some of the progress the government has made on helping charities to date
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second – talk you through some of the announcements that the Chancellor made in his most recent budget…
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and finally – to discuss some of the work that we hope to take forward between
Progress
So first, what progress have we made to date?
You’ll all – no doubt – be familiar with a lot of this, but…
We’ve launched the Gift Aid Small Donations Scheme…
Which allows charities to benefit from a Gift Aid style top up payment on small cash donations.
We’re clarifying the rules for Community Amateur Sports Clubs…
And we’re introducing corporate Gift Aid to encourage companies to support their local sports clubs.
We’ve launched Charities Online to make claiming Gift Aid quicker and easier…
…and acted on feedback from charities that needed help in understanding the new online platform.
And we’ve also:
- reduced inheritance tax for those who donate to charity
- increased the Gift Aid benefit limit for donors
- introduced the Cultural Gifts Scheme
- and introduced the Employment Allowance to reduce NICs bills by up to £2,000 a year – which could help 35 000 charities
So – in four years – we’ve made a lot of very positive changes to the system.
But – as you’ll all know – launching or unveiling or announcing schemes is one thing…
But making sure they’re taken up is quite another.
And of course we – as government – have got a part to play here.
The new HMRC Outreach programme that the Chancellor announced in last month’s budget…
Will play a key role in raising awareness of all these schemes.
They will be a 15 strong team tasked with:
- identifying – and contacting – charities that need help making Gift Aid claims…
- implifying HMRC guidance and forms…
- nd – most importantly –multiplying the number of people who know about – and take advantage of – these schemes
But while we’ve recognised that government can – and that Government will – do more to raise awareness…
You have just as crucial a role to play.
First, we need you to use your networks and your contacts…
To make sure that as many people as possible are aware of these schemes and these reliefs.
And secondly – and most importantly – we need you to take advantage of them…
Because as each future fiscal event comes around…
Be it a budget or a spending review or an Autumn Statement…
Ministers and opposition leaders and journalists will go through our entire tax system with a very fine toothed comb…
And it’s crucial that we’re able to prove that these measures are being used…
And that they are making the difference we intended.
Budget
Of course, we had a big fiscal event just two months ago…
And – again – I hope it contained measures that will support what you do.
We reiterated our support for Gift Aid…
…and our intention to help people donate through modern, digital channels.
We announced a programme of work with donor researchers…
To clarify the wording of the Gift Aid declaration…
And – on top of that – we announced a review and update of the Gift Aid guidance for charities and donors…
Again, so people can understand it more easily…
And access it more easily as part of the GOV.UK site.
The Chancellor also announced…
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that we’ll set the rate of income tax relief for the Social investment tax relief at 30%…
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that we’ll be developing a joint HMRC/Charity Commission portal…
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…to make administration – particularly for smaller charities – easier
And this was an announcement I was particularly pleased to see happen…
We’ll increase the Cultural Gifts Scheme limit…
To allow even more pre-eminent works of art and historical objects to be donated to public collections across the entire nation.
Future work
So – again – the budget built on our progress with further announcements.
And there will be – I hope – a few more announcements to come.
Because wherever you alert us to issues or blockages or problems…
I will do my best to fix them.
Some of you may know that I spoke to the Charity Tax Group at the end of last month.
It was quite clear to me at that conference, that the biggest issue on your mind is tax avoidance.
The first thing I’d say on that, is that we are using the powers we already have to clamp down on those who are abusing the system
Just last week – in fact – HMRC scored its fifth victory against schemes promoted by Matthew Jenner and NT Advisors…
The same Matthew Jenner behind the Cup trust scheme…
Bringing the total tax protected to more than £750 million.
This was in a case against an individual who used a ‘bluebox’ charity tax relief scheme to avoid £200 000 in tax.
And as a result of that decision, about £21 million of tax is likely to be paid by users of the scheme.
So there are measures in place to clamp down on this behaviour…
We did add measures last month, in the form of our accelerated payments change…
And wherever we do see disreputable companies – or individuals – using those reliefs…
Which were set up with the best intentions…
To support the worst kind of behaviour…
We will continue to take action.
As I’m sure all you’ll know, our recent consultation on tax avoidance and the charitable sector has closed…
And officials back at Treasury and HMRC are working through the responses.
Now, while I can’t yet share the outcome of that consultation…
What I can share is the intent – which I’ve always made very clear.
I want to protect innocent charities – and their reputations – from unscrupulous avoiders…
And I will make sure that our response doesn’t harm those reputable charities devoted to making the world a healthier and a happier and – let’s be honest – a better place.
I also know from that conference that there is concern in the sector about take up of the Gift Aid Small Donations Scheme…
So the HMRC outreach team that I mentioned earlier, will have raising its profile as a key activity.
I’m also hopeful that our new and improved guidance will clarify just how easy it is for charities to claim that relief.
And I also was reminded that morning that there are some concerns about donor benefits…
So I went straight back from that conference to the Treasury…
And made sure that our officials are hard at work consulting with charities and rep bodies on areas where we could simplify the process.
In fact, one such official – Cerys Morgan – is on one of the panels later this afternoon…
And if I can’t answer any of your more detailed questions in a moment…
I’m sure that Cerys will be able to expand on my answers further. ###Conclusion
In fact, I’m very keen to get to that Q&A as soon as possible…
Because – presuming I stay in this post
If I want to look back in a years’ time…
And if I want to judge what I’ve done not in political terms, but in Stephen Sutton’s terms.
By what I’ve achieved…
And – by helping charities wring every last penny of every last donation – how many lives I’ve helped you to touch…
Then we as the Treasury – and you as the sector – need to have as honest and as open a dialogue as possible.
So that we can make sure that the schemes already in place work.
That the schemes recently announced are introduced smoothly.
And that ultimately…
And this is the point of all this…
We can make sure that all the money that you raise…
Helps as many people as it possibly can.
Thank you for listening.