Welcome to ICTR
ICTR's 24th Annual Conference
Refugees and Homelessness - Responding Effectively
This year's Conference took place on Thursday 5th November, 2015, and you can view the programme from our Events Page.
VAT on Charities - Budget 2016
Unfortunately Budget 2016 did not include a VAT Compensation Scheme for Charities as we hoped. While the VAT on Charities Working Group Report was published on the Budget website (under related documentation) and was referenced as such in the detailed Budget document the Minister made no reference to it in his speech and no initiatives were included in the summary of policy changes.
As you know the Working Group had its first meeting at the end of May and worked on developing the report between then and the end of September when it was finally signed off and sent to the Minister on the 5th October. It is not clear to us whether the tight timeframe and relatively late delivery of the report was a factor or if it is purely a matter of the budget arithmetic or some other concern that we had not addressed that led to the Minister not acting on it at this time. Following our board meeting today we are seeking feedback on these questions and will be pursuing inclusion of a VAT Compensation Scheme based on the Danish model (as set out in the Report) in the forthcoming Finance Bill.
It is important to note that the Minister for Finance frequently indicates his decision not to implement recommendations and proposals in the Budget. He was silent on this matter and we have obtained a formal Report, signed off on by both Dept. of Finance and Revenue, which points to a specific solution to the long standing charities VAT issue. When we have ascertained more clearly the factors that prevented its implementation, we will be better placed to seek implementation of the Report's recommendations.
2015 version of The Good Form pack now available.
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 for any further information.
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.