Wednesday, March 12, 2008

Pouring Money Down the Drain?

Traditionally, charities have been exempt from paying water/sewerage charges. Providing water for everything from homeless shelters to churches was seen as the very least the state could do, without burdening them with a tax to pay for it. In Scotland, at least, all that could soon change with the government's plans to axe this charitable exemption in their current review of water charging.

The government's handling of the charitable sector over the last decade has been a mixed bag. On one hand the gift-aid scheme has continued to channel a large amount of cash out of government coffers and into charitable works; on the other hand the gradual shift in emphasis from direct to 'stealth' taxes has meant that an ever reducing proportion of the overall tax burden is eligible for such benefits.

If the charitable exemption from water charging is axed as proposed, it will amount to an extra tax being imposed upon some of the most valuable work being done in our communities. In Scotland it is a de facto tax, because Scottish Water remains state owned. It is certainly the case that as we enter a probable recession, the government's revenues from business profits will tumble, their borrowing increase and they will need to claw-back expenditure from every conceivable source. The fact remains however that we still pursue foreign policy initiatives which in their scale have failed to notice our decline from being a major world player with an Empire, to being a minor European state. The UK bill in Iraq has now topped £7bn, but apparently we cannot pipe water to the CATH centre for the homeless in Perth, without taxing them.

If the general principles of this proposal seem all wrong, the details look worse. Whichever well-meaning bureaucrat was charged with the task of establishing principles for charging water rates has decided that the most equitable way of banding the properties is by 'roof area'. This bizarre and entirely arbitrary idea no doubt looks terrific when viewed from the perspective of ...... well anywhere except the real world. In practice it could mean that a large church building could be put into a very high billing-band, not because hundreds of church-members go there to bath, wash their clothes, run their dishwashers or run micro-breweries or other such water-guzzling activities, but simply because their beautiful old church has a lot of roof tiles.

If, like me, you think that the government should be recognising the value of the charitable sector and not imposing such burdens upon it, read on! There is a petition being presented to the Scottish Government, requesting that the charitable exemption from water charges be maintained. If you agree with me and wish to sign it, you can do so here. If you disagree, tell me why!


Steg said...

I agree, but I think the definition of charity is too broad. For instance, does this mean that private schools, including boarding schools, currently get free water and sewage? In which case why am I subsidising the rich every time they wash and poo? I agree wholeheartedly on CATH and would agree with you completely if the definition of charity were not so bizarre.

That Hideous Man said...

I don't know if private sector education is included in this or not (but I agree that their charitable status is odd). Heavier users of water (like the church I go to which has a huge number of groups using the premises every day) are already outisde the exemption and are metered because of the amount used. I imagine that independent schools would be the same. I'll ask my Dad, he worked inprivate education for many years - until he decided it wasn't ethical!

Steg said...

That's interesting. If they bring in banding for churches etc then it might make sense for the low water users to be metered as well. They might pay less that way.

That Hideous Man said...

Yesterday's budget contained a further assault on charities. The following comes from the BBC website:

"As already announced, the basic rate of income tax will reduce from 22% to 20% from 6 April.

The Gateway will be an extremely valuable benefit for those entitled to participate

This is good news for many taxpayers, but bad for charities, who recover less money under the gift aid rules.

However the chancellor said that charities can continue to reclaim at 22%, but only for three years."