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Taxpayer Funded Madness – Part 2

6 October 2010

I can always rely on Judith!  I knew she’d put me right on the charitable status rules and once again, she came up trumps. 

Over to you, Judith:

“It’s a bit more complicated than this, unfortunately!

I heard a druid representative on the radio last week. She explained that druids wanted to register as a charity as they feel that they do “good works” of public benefit, which is the criterion they have to meet to register. She said that druids help to look after the natural environment.

BUT the Charity Commission in the UK only recognises three types of charitable activity – education, the relief of poverty and religion. When I started the first charity for family carers (caregivers) in the UK back in 1981, it took 3 years for the Commission to acknowledge that carers could be a charitable class and allowed us in under the relief of poverty heading, as most carers are impoverished by their caring duties – giving up work, etc.

So the druids had to go under religion, as they aren’t working for the poor or primarily involved in education.

The tax relief isn’t considerable – mostly related to tax exemption on investments. However, this is offset by the fact that they now cannot recover VAT (sales tax) on any purchases. This means that they will, generally, be paying an irrecoverable 17.5% and from 1 January 20%. Charities in the UK contribute over £3 billion a year to the exchequer because of this rule.

So it’s swings and roundabouts, really… May the spirits of dale and glade go with you.”

I’m confused about the not-reclaiming VAT rule as my memory of accounting in the UK was that charities could sign a declaration of their status and they weren’t charged VAT. It looks as though that has now been abolished. 

But the Commissioners class religion as a “charitable activity”???

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2 comments

  1. At the risk of being VERY boring, the religion as a charitable activity rule dates back to the first charities in the time of Elizabeth I, when all “charitable work” was done by the religious orders. “Charity” comes from the latin word for “care”.

    There are still some wonderful ones in existence from way back. My favourite charity gives £4 a year to “blind spinsters of good deportment, not being born in Wales or Hull” (two regions of the UK).

    Some of the weirdest ones (trusts set up for the benefit of men with red hair, or whatever) were set up to spite the family of the deceased and do them out of their inheritance as it’s nearly impossible to overturn a will.


  2. Judith, I love those details!

    I suppose historically it all makes sense, Sal, as eg schools, all those posh London hospitals (and of course those elsewhere) were all a part of religious endeavours. It’s just different now!



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