Finance group claims clean Brexit will benefit charity sector

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The Charity Finance Group findings have been called into question by the Scottish Council for Voluntary Organisations

2nd August 2017 by Gareth Jones 0 Comments

A clean Brexit would offer the most potential for the charity sector to thrive, a finance group has claimed.

The Charity Finance Group (CFG) released a new report this week which identifies opportunities and risks for the sector.

In A Brexit that Works for Everyone: Brexit Opportunities and Risks for the UK Charity Sector, the group states that the worst possible situation would be the UK remaining in the single market and having EU-compliant tax, state-aid and procurement policy without the ability to change regulations.

However the Scottish Council for Voluntary Organisations (SCVO) has called into question the findings, arguing a strong economy is vital for the sector.

The CFG report said that a clean Brexit could offer an opportunity to reduce the tax burden on charities.

“A clean Brexit, without the need to consider harmonisation with the rest of the EU, would be the safest way to achieve this,” it said. “Other deals could still achieve this and the UK should consider this as a red line in the negotiations, however, even with a free trade deal, there is the risk that harmonisation could be enforced under the threat of the UK being said to act in a way to undermine competition.”

The group highlights the importance for the UK to consider access to EU funds as a key area of negotiation, and should be prioritised.

A six-point plan for a successful Brexit, including the ability for the UK to change VAT rules and a flexible immigration system that allows charities to hire the workers they need is set out.

The report concluded: “Overall, the balance of evidence indicates that the risks to the UK charity sector are fewer through a clean Brexit than through remaining in the Single Market and customs union with the EU which could create the worst of both worlds: stuck with historic problems but unable to resolve them as the UK would no longer be part of setting EU rules.”

However the findings of the report have been questioned by SCVO.

"By only focusing on the narrow interests of charity finance directors, this report harshly ignores what's best for the people and communities charities work with and support," said SCVO director of public affairs John Downie.

"Recent SCVO research shows 86% of charities in Scotland feel that leaving the EU will damage the Scottish economy, negatively impact poverty and social exclusion, and push up demand for charities’ services in a time of severe financial constraint.

"A strong economy is vital for the third sector, so being part of the European single market is critical to the third sector as it is for business.

"CFG calls for a clean Brexit are preposterous and self-serving – they do the sector a real disservice."