A round-up of parliamentary questions in summer/autumn 2019 relating to issues likely to be of interest to CTG members.
Q1: To ask the Chancellor of the Exchequer, what assessment he has made of the potential merits of removing VAT from wills that include a charitable donation. [Paul Farrelly MP, Lab]
A: Under current EU law, it is not possible to remove VAT on fees for writing wills where those wills include charitable donations. [Jesse Norman MP, Financial Secretary to the Treasury]
Q2: To ask the Chancellor of the Exchequer, what assessment she has made of the potential effect on the economic wellbeing of charitable organisations of removing VAT from the cost of writing wills that include a charitable donation. [Stephen Morgan MP, Lab]
A: The costs for writing wills that include a charitable donation are subject to the standard rate of VAT. Under the current EU VAT rules, it is not possible to zero rate or exempt these costs from VAT. Whilst the UK remains a member of the EU, it must comply with the rights and obligations that membership entails. This includes the application of EU VAT rules. The Government is clear that tax is a sovereign matter and that it will be open to us to change in the future or include in any negotiations with the EU. While there might be more flexibility in the future, removing VAT on the cost of writing wills would need to be measured carefully and balanced against wider policy, economic and fiscal considerations. [Simon Clarke MP, Exchequer Secretary to the Treasury]
Q: To ask the Chancellor of the Exchequer, what assessment he has made of the potential merits of reforming Gift Aid so that the value of additional and higher-rate tax reliefs is automatically directed to charities, unless donors choose to opt out. [Paul Farrelly MP, Lab]
A: The Government recognises that charities are a vital part of our society and continues to provide support to the charitable sector worth over £5 billion per year, with Gift Aid being one of the most generous tax reliefs available – worth over £1.3 billion per year to charities and £520 million to their donors (through higher rate relief). The Government has made no assessment of the merits of reforming Gift Aid to allow the additional and higher rate tax reliefs to be automatically directed to charities unless donors opt out. [Simon Clarke MP, Exchequer Secretary to the Treasury]
Q: To ask the Secretary of State for Education, what the value of apprenticeship levy funds expiring from employers’ accounts was in July 2019; and what plans the Government has for those funds. [Catherine McKinnell, Lab]
A: The amount of funds expiring in employers’ digital apprenticeship service accounts in July 2019 was £44 million, and in August 2019 it was £52 million. As well as funding apprenticeships in levy-paying employers, levy contributions are also used to fund training for existing apprenticeship learners and new apprenticeships in employers that do not pay the levy. We do not anticipate that all employers who pay the levy will need or want to use all the funds in their accounts, though they are able to do this if they wish. [Kemi Badenoch, Parliamentary Under-Secretary (Department for Education)]
Q: To ask the Secretary of State for Digital, Culture, Media and Sport, whether the Government has plans to undertake a comprehensive review of charity taxation and reliefs. Also to ask the Secretary of State for Digital, Culture, Media and Sport, what assessment he has made of the potential effect on the financial wellbeing of charitable organisations of introducing a universal Gift Aid declaration database. [Stephen Morgan MP, Lab]
A: The Government is committed to supporting the vital work that charities do for the UK, which is why it provided £5.3 billion worth of tax reliefs to the sector and its donors in 2018/19, including over £1.3bn of Gift Aid. No assessment has been made of the impact on charities regarding the proposal made in the report by the independent Charity Tax Commission published in July 2019 to introduce a universal Gift Aid declaration database. The Government keeps all tax reliefs under review. However there are no plans to undertake a formal comprehensive review of charity taxation and reliefs. [Simon Clarke MP, Exchequer Secretary to the Treasury]
Q: To ask the Chancellor of the Exchequer, what discussions he has had with (a) his counterparts in other EU member states and (b) industry of the potential merits of introducing a reduced rate of VAT on e-publications; and if he will make a statement. [Ian Murray MP, Lab]
A: Any amendments to the VAT regime as it applies to physical publications and e-publications must be carefully assessed against policy, economic and fiscal considerations. Any representations on this issue will be considered as part of the fiscal events process. The Government is aware of moves in some EU Member States to apply a reduced rate of VAT to e-publications. Within the UK, officials have met with a range of interested stakeholders*, including representatives of the publishing industry, to better understand the functioning of the market.
*In respect of this answer, members should note that CTG was among the stakeholders consulted on the potential impact for the charity sector.