An Essential Update On Charity Finance Policy From CFG

Charity Finance Group’s Director of Policy and Engagement Roberta Fusco shares the latest policy updates you need to know about for your organisation.

Charity Finance Group is a charity and membership organisation.

CFG works to empower finance professionals and organisations with best practice, financial skills and leadership, and campaigning for a better operating environment.

AIM members can join CFG and access membership benefits for free.

Join now at cfg.org.uk/aim

And – don’t miss CFG Chief Executive Caron Bradshaw speak at the AIM National Conference this June!

Brexit

There’s no getting away from the discussions on Brexit. This overshadows almost all else in every policy field and yet, we are still only inching closer to a resolution. We are pleased to have been able to work with others across the sector to influence the government in creating guidance on how your charity can prepare for Brexit. We would also encourage you to look at the government’s guidance to consider how your organisation might be affected and how you should prepare.

Local funding environment and forthcoming Spending Review

We are planning a series of policy roundtables to discuss with members the future UK Shared Prosperity Fund and local funding environment, in preparation for the forthcoming government Spending Review expected in the autumn. CFG is also working with other sector bodies to provide a joint response to the MHCLG Local Government Finance and the 2019 Spending Review inquiry.

Spring Statement

The Spring Statement seems like a lifetime ago, and yet the warnings the Chancellor gave about the economic impact of a no-deal Brexit loom larger than ever, warning that there would be “no simple fix to avoid the consequences”.

CFG’s briefing summarises the key points for charities, and there are a number of announcements of interest:

  • A Call for Evidence on potential simplification and improvement of the VAT Partial Exemption regime and the Capital Goods Scheme.
  • On Making Tax Digital the government has reiterated that where organisations are doing their best to comply, no filing or record keeping penalties will be issued and also confirmed that the government will not be mandating MTD for any new taxes or business in 2020
  • An operational review into Insurance Premium Tax

Making Tax Digital

Making Tax Digital became law on 1 April and eligible charities will need to have begun keeping digital VAT records and send their VAT returns using MTD compatible software (aside from those who have had mandation delayed). HMRC have provided some useful guidance which should help charities get to grips with the new system. Please find a selection of these updates below:

  • VAT Notice 700/22 is the main guidance relating to Making Tax Digital for VAT. This was updated on 5 March 2019 with guidance on who is exempt from following the rules for Making Tax Digital for VAT, and outlines the application process
  • The software choices selection tool on uk has been enhanced with the addition of filters in regard to accessibility, and bridging software
  • HMRC has produced a Mythbuster to help address some of the misconceptions about Making Tax Digital

Dormant assets

The government has published the independent report it commissioned from finance industry champions setting out how to expand the dormant assets scheme and release more funds for “good causes” – The Dormant Assets Scheme – A Blueprint for Expansion.

The report calls for more transparency about how dormant account money is used and also said that primary legislation was needed to expand the scheme to other areas. DCMS said it would consider the recommendations, consult with stakeholders and set out next steps “in due course” but stopped short of making any mention of setting up a ‘Community Wealth Fund’, as called for by an alliance of charity bodies last summer.

 

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