§ Mr. Malcolm BruceTo ask the Chancellor of the Exchequer what is his estimate of the total tax paid by all United Kingdom domiciled charities for each of the years(a) 1979–80, (b) 1990–91 and (c) 1994–95; and if he will make a statement on the taxation of charities and the implications for charities of the changed balance of taxation between direct and indirect. [11320]
§ Mr. Jack[holding answer 23 January 1996]For 1994–95, it is estimated that charities paid the following tax:
£ million Income and capital taxes 1neg VAT 350 National non-domestic rates 100 1 "neg" = negligible (under £3 million). Estimates of the excise duties paid by charities are not readily available, nor are comparable figures for the earlier years.
The Government value the work of charities and encourage charitable activities through the tax system. Charities are exempt from tax on most of their income and gains.
Since 1979, the Government have done a great deal to extend and improve the tax incentives to give to charity by deed of covenant and under the gift aid and payroll giving schemes. In 1994–95, tax reliefs for charities totalled £1.5 billion, of which £900 million related to direct taxation, £200 million to indirect taxation and £400 million to rate relief.
The Government's overall tax policy is aimed at leaving people with more money to spend as they choose. That choice includes the possibility of giving more to charity.