Chancellor urged to exempt charities from insurance premium tax

Voluntary sector finance experts have ramped up their call for charities to be exempt from paying tax on insurance premiums.

A renewed call for an end to the tax for charities has been made by the Charity Finance Group (CFG), the Charity Tax Group as well as specialist insurer Ecclesiastical ahead of tomorrow’s Spring Budget from Chancellor Rishi Sunak.

They say that insurance is an “unavoidable cost for charities” and the additional cost of on premiums is putting a “strain on already stretched budgets”.

CFG policy manager Richard Sagar said: “Against a backdrop of increasing demand and reduced capacity to deliver services, the elongated nature of this crisis means that any additional tax burden on charities will mean their ability to help those most in need will be in jeopardy.

“With renewed pressure on the Chancellor to increase so-called ‘stealth taxes’ to help raise revenue, Charity Finance Group is calling for charities to be exempt from insurance premium tax, and at a minimum for no further increases.

“We are also calling on the Chancellor to deliver a renewed package of dedicated support measures for charity and social change organisations, so that we can meet the immediate challenges presented by COVID-19, build back better and level-up our communities.”

Ecclesiastical charity director Angus Roy added: “Charities have become used to dealing with challenges, but this year has given us a perfect storm of a loss of funding through fundraising activities and an increase in need - which has left many charities at crisis point.

“The charity sector has constantly stepped up to support those most in need and has worked tirelessly in our communities throughout the pandemic. The money saved by not paying IPT would free up vital funding and help contribute to increasing their impact.

“At the same time we urge the government to do more to support the charity sector – and that is why Ecclesiastical is lending its backing to the budget submission the CFG has made, in conjunction with the Charity Tax Group, to the government calling for more support for the sector.”