Ecclesiastical, alongside the Charity Finance Group (CFG), is calling on the chancellor to make charities exempt from paying IPT ahead of the March budget.
IPT is a tax on general insurance premiums, such as home, car and travel insurance. However, Ecclesistical claims that the “vast majority” of charities, especially those who own property and have “significant” operational costs, are also impacted by the tax.
Ecclesiastical insures more than 45,000 charities and not-for-profit organisations in the UK and for a number of years the specialist insurer has lobbied the government to make charities exempt from paying IPT.
Last year Ecclesiastical carried out research involving a survey of 250 charities and found that the sector was “creaking under the combined weight” of increased demand and reduced funding, with two thirds (72%) concerned about funding as a result of the pandemic and a third (32%) worried about “existing beyond the crisis”.
Angus Roy, charity director at Ecclesiastical, said: “We are again urging the government to very carefully consider the negative impact that IPT is having on the work that charities do and grant them an exemption from this tax.
“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.”
Richard Sagar, policy manager at Charity Finance Group, added: “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.”