Community, Public Policy
April 01 2000
by Mike TuffreyThe annual budget process has always been a great set-piece occasion for the Chancellor to present the whole government programme. Here let's focus on just two aspects, charitable giving and the so-called regulatory burden.
On giving, the announcements go halfway to address the call we made in Community Affairs Briefing last year (Issue 45) to remove the tax barriers to greater community involvement. Cash giving to charities is now sublimely simple, even though the whole system is still built on the contrivance of routing payments either as business expenses or as pure donations - at complete variance to the win-win philosophy of CCI. The new relief for gifts of shares is welcome, but the lack of action of new funding forms such as interest free loans is disappointing.
More importantly, the government has failed to remove the VAT disincentives to in-kind giving where a convoluted paper-chase is still required to give away obsolete PCs and redundant products. On VAT, the charities have been moaning loudly but to no effect as the cost of widespread exemptions is huge and European legislation restrictive. This has drowned out attention to in-kind gifts, a potentially very valuable resource. Alas, too many charities still see companies as a source of money, not of time, expertise and in-kind resource.
Talking of moaning, the second aspect to note is the increased regulatory burdens on business. Orchestrated by the triumvirate of the CBI, the IOD and the BCC, the chorus of complaint centres on the complexity of tax systems, the cost of payroll administration and the burden of family-friendly rights to maternity and paternity leave. Here, little sympathy is warranted, as they are trying to have it both ways.
The old way was for the government to do it all, with high taxes and bureaucratic inertia. The new way is to reduce taxation and involve other players in addressing social issues. If business wants low tax and its social remit recognised, there is bound to be some pain along with the gain. Getting and keeping more people in work is the right way forward, with huge benefits in terms of social cohesion. Business should be prepared to play its part by bearing a very modest administrative burden.