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STOP PRESS: 2014 version of The Good Form pack now available.
The Good Form campaign tax mailing pack has been updated to take account of changes to the scheme.
Access to print-ready artwork is available to The Good Form member charities now. You can view the Form, the Letter and the Notes here. If your charity has not joined or renewed your membership, please complete this Purchase Order form.
Email firstname.lastname@example.org or call Bruce Clark on 085 717 0617 for any further information.
Charities must display transparency in fundraising and spending, says ICTR
29th November 2013
Charities should devote sufficient resources for wages and administration to ensure the highest standards in their operations, but must at all times display full transparency and full public accountability in how they fundraise and in how fundraised money is allocated, ICTR - the representative body of Irish charities has stated.
All charities have as the central reason for their existence the provision of vital public services and supports. It is essential that the strong trust of the general public in charities and their services be maintained and fostered.
The current roll-out of the Charities Act, on which ICTR is working closely with government, should proceed and be completed without delay. It should be adequately resourced, to ensure its full implementation and to provide both charities and the general public with clear understandings and assurances on issues such as governance, fundraising and financial reporting.
While the specific affairs of each charity are a matter for its individual Board, ICTR believes that all charities should operate according to clear and specific fundraising principles. These include:
- Making information freely available and transparent to the public at all times
- Adopting an honest and open approach on all fundraising activities
- Providing a clear assurance to donors that their gifts will be used for the purposes for which they were given
- Ensuring there is no misleading or ambiguous information in fundraising communications.
Allocating sufficient expenditure to staff, administration and management is essential to ensure that all resources, including donations, are used to greatest effect for public benefit and that the highest standards are maintained at all times. The general public expects charities to be run to high standards. Full transparency on all issues related to financial matters is a central part of responding to this expectation, ICTR states.
Timetable for the setting up of the Charities Regulatory Authority announced
The Minister for Justice and Equality, Alan Shatter, has announced that the government has approved his plans to proceed with the establishment of a Charities Regulatory Authority as provided for in the Charities Act 2009. The press release states that the Authority will come into operation in 2014 and that it will have a staff of approximately 20. The fact that charities will make a contribution to the cost of setting up the regulator through the proposed registration fee is cited as the reason it is now possible to move ahead with putting the regulatory system in place.
The Minister intends to issue a public call for expressions of interest from suitably qualified persons who wish to be considered for appointment to the Authority in the coming months with a view to making appointments by the end of this year so that the Authority can come into formal operation in 2014. He also announced that the outcome of the public consultation on charities regulation carried out earlier this year are now published on the Department's website.
Changes to the tax relief on donations to charities effective from 1st January 2013 – operational details and forms now available
ICTR is delighted to provide details on the simplification of the tax relief scheme on donations to charity that we achieved in Budget 2013 and subsequent Finance Act . The operational details were announced by officials from the Charities Unit in the Revenue Commissioners at a briefing session arranged by ICTR at which the new forms CHY 3 and 4 were launched (27th June 2013).
Information Seminar on the Consultation Process for the implementation of the Charities Act 2009
The Government recently announced a consultation on how the Charities Act 2009 is to be implemented. To help you get to grips with this process, ICTR co-hosted a special information seminar on 19 February 2013 at Chartered Accountants Ireland (CAI) in Dublin.
Click here to view the presentation slides
Click here to watch the presentation in full
This free seminar was jointly organised by ICTR, The Wheel, Boardmatch Ireland, Business to Arts, Carmichael Centre for Voluntary Groups, Conference of Religious of Ireland (CORI), the Disability Federation of Ireland (DFI), Dochas, Representative Church Body (RCB) and Volunteer Ireland, with support from CAI.
For more details on the consultation process, visit the Department of Justice & Equality website.
Public Consultation on Implementation of Charities Act announced
The Dept. Justice and Equality have published their consultation document on implementation of the Charities Act. ICTR will provide additional briefings and seek your views on the questions raised but in the meantime here is a brief summary of the content and a link to the full document.
The consultation focuses on three key areas:
- The setting up of a Charities Regulatory Authority and what the key priorities should be in the first phase given the budgetary constraints.
- The establishment of a Register of Charities including how this is likely to be used and what additional information might be included.
Charities will be required to pay an annual registration fee and this section seeks views on a proposed fee structure based on gross annual income categorised into five bands with fees ranging from a token fee in band 1 (e.g. €10) to a max. €500 in band 5.
- Financial and Activity Reporting by Registered Charities to the Charities Regulatory Authority.
This section sets out the financial reporting requirements under the Charities Act for different types and sizes of charities. Views are sought on the proposed thresholds for different levels of reporting and independent scrutiny and also on what additional financial information should be required from charities by the Authority and in what format.
Incorporated charities will continue to make their annual returns with annual accounts to the Companies Registration Office (CRO) which will pass them on to the Charity Regulatory Authority (CRA) except where a charity is not required by the CRO to attach annual accounts in which case they will be required to attach them to the Annual Activity Report to the CRA.
All charities are required to submit an annual Activity Report to the CRA and views are sought on the format and content of this report.
There will be an 8 week consultation period with a closing date of 20th March for submissions. The consultation document is available on the Department website and those responding are encouraged to make their submissions online. Submissions will be made public and after the consultation has closed, it is envisaged that a summary and response will be compiled and published by the Department.
We encourage your charity to make a submission and will be happy to provide you with any help and advice you need.
ICTR is finalising details with the Department of Finance on implementation of revisions to the charitable donations tax scheme, announced by Minister for Finance, Michael Noonan, TD, in December’s Budget.
The changes, which will benefit Charities by a projected €18m annually, were agreed by ICTR along with Revenue and the Department of Finance over the previous 18 months and submitted to the Minister for consideration.
The new scheme replaces a more cumbersome system and will, for the first time, treat donations by PAYE and self-assessed donors in the same way. The principle changes include:
- Tax relief on donations will in future be paid directly to the charity, applying equally to PAYE and self-assessed donors.
- Tax relief will be allowed at a new ‘blended’ rate of 31%, regardless of the donor’s actual tax rate, thus valuing all donations from the public equally. This was a significant achievement for ICTR, given that the Commission on Taxation had recommended standardisation of charitable donations tax relief at 20%.
- Donors may in future opt to make an ‘enduring declaration’ to their favourite charity for up to five years. This removes the need for annual form filling by donors and eases the administrative burden on charities and Revenue. Data Protection rules have been clarified to facilitate this change.
Treating self-assessed tax relief in the same way as PAYE is expected to provide the additional €18m annually to the sector. The change will be cost neutral to the Exchequer as the relief will go to the charity instead of the donor.
Sheila Nordon, Executive Director of ICTR, said that for every €2 donated by the public, the government will now add almost a euro ‘top-up.’ “This will incentivise independent fundraising by charities and assist the sector to maintain and expand its work and services.
“The ultimate winner will be the people who rely on a specific charity for support and assistance, whether the elderly, people with illness or disability or many others who are vulnerable and in need, both at home and abroad,” she said.
The decision by government on this issue, amid restrictions in spending in most other areas is an important recognition by government of the work being done by charities.
Further specific details on the scheme will be provided by ICTR when available.
Statement of Guiding Principles for Fundraising
More than 60 charities have now signed up to the Statement of Guiding Principles for Fundraising. Sign-up has been slower than anticipated and ICTR strongly urges charities who are in the process of signing up to finalise this as soon as possible. Click here for a list of Organisations who have already signed up.
The principles set out Codes of Good Practice on the operational and administrative aspects of fundraising by charities. Details on signing up for the Codes can be accessed here: Sign Up to the Statement of Guiding Principles for Fundraising. For information or assistance on implementing the principles check ICTR’s Implementation Resources page here.
Discussion on VAT to be resumed
Discussion on VAT to be resumed The Minister for Finance, Michael Noonan, TD, has previously signalled his intention, in both the Dáil and Seanad, to address the long-standing issue of VAT affecting charities. He suggested that a Working Group, similar to that which dealt with the charitable donations tax scheme, be utilized to address VAT also.
Commencement of work on this area was deferred due to practical difficulties in finalizing the donations scheme changes and also in addressing how the progress could be delivered on implementation of the Charities Act. ICTR plans to develop work on the VAT issue during the coming months. A potential solution ‘template’ exists in legislation already in operation in Denmark. Following an agreement between the government and the charity sector there, VAT Compensation payments are being made to charities. This followed previous confirmation from the European Commission that, while charities could not be directly refunded VAT under EU law, member states could set up VAT compensation schemes at national level to address the issue. The sector pays VAT on essential expenditure, from information leaflets to providing equipment, facilities and buildings. This severely restricts the level of work that can be undertaken by charities while impacting on independent fundraising.
ICTR sought clarification during the initial consultation process regarding the position of charities in the government’s proposed legislation on lobbying, due to be implemented during 2013. Charities involved in advocacy will have to register, but this will not affect their tax exemption status. For the avoidance of doubt, ICTR has ensured that a provision to this effect is included in the legislation. The proposed wording will be along the lines of the following (subject to Parliamentary drafting).
"The registration of a charitable organisation on the register in respect of lobbying activities in relation to matters connected with the organisation’s charitable purpose and where such matters are of public benefit, shall not of itself preclude the organisation from applying for, availing of or, as the case may be, retaining exemption from liability to tax or duty under the relevant provisions of the Taxes Consolidation Act 1997, the Capital Acquisitions Tax Consolidation Act 2003 or the Stamp Duties Consolidation Act 1999."
Kathleen Lynch, TD, Minister of State in the Department of Justice addressed the recent Conference on Thursday, November 8th last in the Ashling Hotel, Dublin.
Minister Lynch has responsibility for a number of areas of relevance to charities including disability, older people, equality and mental health, as part of her responsibilities in the Departments of Justice and Health.
She is the first Labour Party Minister to address an ICTR Conference. She also spoke on behalf of the government during a recent Labour Party Senators motion on Regulation in the Seanad.
In her address Minister Lynch said that, her portfolio of Disability, Equality and Mental Health “brings me in frequent contact with the valuable work of charities... I see expertise, drive, compassion. I see innovation, management skills, people skills. …..This sense of commitment to a better future is something that we need now as much and perhaps even more than we have ever needed it. That is why you in the charities sector have a very special part to play in our national recovery and renewal.”
Confirming plans to consult with the charities sector and the public on implementation of the Charities Act and plans to shortly publish a consultation document, she said: “I feel it’s also important to acknowledge the huge challenges many charities are facing at present. Far from being immune to the effects of the economic crisis, many charities are facing reductions in income at the same time as demand for their services increases.
“Donations from the public are under pressure as personal incomes fall for many people. And for those many charities that depend on State funding for a large proportion of their income, the urgent need to reduce Government expenditure across all sectors has resulted in funding reductions. This means that, just as we are having to do in Government Departments and Agencies, charities are having to take very difficult decisions about how to retain core services. I know that’s difficult. And I know there are no easy answers.
“When the need is as great or greater than ever, but the resources are simply not available at the levels they were in previous years, we need to work smart and work together and find ways to meet as much of the need as we possibly can.”
Property Tax / Social Housing
Registered charities that own property that is used or is capable of being used for accommodation purposes will be liable to pay the government’s new Property Tax, which comes into operation this year. Only property being used for charitable purposes will be exempt.
ICTR plans to launch a membership drive in 2013, to expand the current 160 plus membership of the organisation. The success of work on the charitable donations scheme and the consultation and briefing process engaged in by ICTR during the process shows the value of membership to a broad range of charities, who will be able to make direct input to discussions with government on issues concerning them.
The next two years will see the implementation and roll-out of the Charities Act, including registration, reporting and other issues around regulation. This will involve and affect all registered charities. ICTR plans to provide briefings, information and consultations for its members during this period and will be working closely with government to ensure that all relevant issues are dealt with appropriately and resolved in a manner that is workable for charities, large and small.
Irish Charities Tax Reform Group is a leadership organization working on behalf of charities to enhance the conditions for a vibrant and independent charity sector in Ireland. ICTRG promotes the implementation of policies to optimize the financial value of donations (by charity friendly tax reform) and underpin public and donor confidence in charities.
Our sister organisation ICTR has carried out research on VAT and Charities, tax relief on donations and, on how regulation of fundraising by means of Codes of Practice can work in Ireland. ICTR has been closely involved at all stages of the development of the Charities Act 2009 and is now firmly focused on implementation issues. Read or download ICTR's Briefing Note on the Charities Act 2009 (PDF format 19KB) here.