CTG in the News
12 October – Charity Digital HMRC confirmed last month that it is set to alter the way digital advertising is taxed. Many forms of online advertising will now be exempt from VAT and receive a zero rate charge. The move follows a long campaign by sector body the Charity Tax Group (CTG) and is set to see the cost charities incur when they advertise online slashed.
9 October – BusinessCloud A Gift Aid tech project instigated by the Charity Tax Group is set to help charities pocket £560m extra a year. The Future of Gift Aid uses Swiftaid technology, pioneered by the payments firm Streeva, which allows Gift Aid to be added automatically to donations made via card payments while taking care of the entire claiming process by generating declarations, claims and all reports required by HMRC.
9 September – Accountancy Daily HMRC has issued a brief on VAT and digital advertising by charities, which confirms VAT is no longer considered due on the majority of internet search browsing advertisements. The clarification follows a three-year campaign by the Charity Tax Group (CTG), which argued that the previous approach meant costs were generally being passed on to charities, amounting to millions of pounds of irrecoverable VAT.
9 September – UK Fundraising HMRC confirms that location-targeting services can be zero-rated. The Charity Tax Group (CTG) has been engaging with HMRC on this point for approximately three years. In July this year, CTG received a letter from HMRC, confirming that VAT was no longer considered due on internet search browsing advertisements, except where they appear on personal social media accounts.
7 September – Civil Society News Sector bodies urge government to lift state aid restrictions to help large charity retailers. The Charity Tax Group and the Charity Retail Association have urged the government to remove state aid restrictions on a grant scheme in order to free up funds for charity retailers.
31 July – UK Fundraising A Charity Tax Group campaign has successfully seen changes made to HMRC’s policy on ‘digital advertising’ VAT that will result in cost savings for charities. HMRC has previously ruled that most digital advertising should be subject to VAT, and had started to raise assessments to recover VAT from some advertising agencies. These costs were being passed on to charities. The Charity Tax Group (CTG) has been challenging HMRC on this for more than two years. This month (July), it received a letter clarifying the HMRC view of the VAT position.
1 June – UK Fundraising HMRC has agreed to relax a few Gift Aid rules because of the COVID-19 pandemic. Many of these have been negotiated by the Charity Tax Group.
7 April – UK Fundraising Chairman of the Charity Tax Group John Hemming, wrote to the Chancellor in March requesting immediate support for charities through the tax system during the pandemic, and including a number of proposals including to allow charities to keep Gift Aid for cancelled events. In a response to a Parliamentary Question last week, the Government indicated that it will allow this in respect of theatres and other cultural venues, and CTG is now liaising with HMRC and DCMS to confirm the details with the hopes of the Government allowing more charities to benefit.
30 April – Civil Society News A coalition of civil society bodies is calling on the government to divert surplus local authority coronavirus funding to small charities. The bodies, led by the Charity Tax Group along with NCVO, NAVCA, the Small Charities Coalition and others, have contacted the Treasury and the Department for Business, Energy and Industrial Strategy about reforming the Small Business Grant Fund scheme.
20 March – Civil Society News The Charity Tax Group has urged the government to allow charities to keep Gift Aid on donations originally made for cancelled events. It has written to the chancellor putting forward six proposals about using the tax system support charities during the current crisis. This comes as people across the sector are calling for the government to do more to help charities that are facing unprecedented income and cash flow challenges.
22 August – Civil Society The Charity Tax Group echoed OSCR’s concerns in its submission, warning that the changes could have negative effects for charities across the UK. It said: “We share OSCR’s concerns and we believe that the impact could be damaging to the public’s trust and confidence in the sector across the UK, not only in Scotland.”
17 May – Civil Society The Charity Tax Group has said that a tax on social media adverts could cost charities millions and said it is seeking legal advice to challenge HMRC’s position.
16 May – Civil Society At the Charity Tax Group (CTG)’s Annual Tax Conference yesterday, charities warned they could be unable to comply with the laws when they come into force because the required software is not yet available.
15 May – Third Sector It is too late for charities to start planning for a hard Brexit if the UK leaves the European Union without a deal next year, delegates at the Charity Tax Group’s annual conference have heard.
06 February – Third Sector John Hemming tells All-Party Parliamentary Group on Charities and Volunteering that the system should be flipped on its head [and] charities should be exempt from all taxes unless parliament specifically legislates otherwise. Hemming said that the current system was so focused on preventing tax avoidance that it led to unfair taxes on charities.
01 February – Charity Finance Richard Bray, vice-chairman of Charity Tax Group and regulatory and taxes manager at Cancer Research UK, outlines modest but beneficial changes announced in the Autumn 2017 Budget.
24 January – Third Sector An independent commission has been set up to suggest ways in which the tax system can be improved for charities. […] The Charity Tax Group has long campaigned for a number of changes in charity tax law. In its last Budget submission, which was published on its website in September, the CTG prioritised issues such as tackling irrecoverable VAT, including a wider strategic review of the VAT system in the UK, and the administrative burden of dealing with the demands of the charity tax system and keeping suitable records.
19 January – Civil Society HM Revenue & Customs has published updated guidance on the VAT treatment of grants and contracts to clarify which services are eligible for VAT. The Charity Tax Group said it has been engaging with HMRC on the replacement guidance and was pleased to see the inclusion of new case law updates and greater clarity about what services are eligible for VAT.
23 November – Charity Digital News One of the key points delivered by the Chancellor of the Exchequer include an amendment to the Gift Aid donor benefit rules – the government will reduce from three to two the monetary thresholds setting out how much the value of benefits that charities can give a supporter as a result of a donation and still claim Gift Aid on that gift. Responding to the announcement, the Charity Tax Group said this means that, from April 2019, benefits can be worth up to 25 per cent of the value of donations of up to £100 and worth up to 5% on donations of more than £100.
22 November – Civil Society The government is changing the way it handles business rates. It will trial a system of allowing local authorities to retain what they collect, rather than the current system, where rates are redistributed across the UK. The Charity Tax Group and Charity Finance Group have previously expressed concerns that this will encourage a crackdown on discretionary rate relief.
22 November – Third Sector A change to Gift Aid donor benefit rules and the final tranche of charity funding from Libor fines were among the announcements affecting the voluntary sector in today’s Autumn Budget.
The government will reduce from three to two the monetary thresholds setting out how much the value of benefits that charities can give a supporter as a result of a donation and still claim Gift Aid on that gift.
The change will mean that from April 2019 benefits can be worth up to 25 per cent of the value of donations of up to £100 and worth up to 5 per cent on donations of more than £100, the Charity Tax Group said.
22 November – Civil Society Ahead of the first Autumn Budget the publication summarised some of the charity sector’s key demands. Tax Group urged the government to consider reform of the tax system to better support charities. The CTG also called for a strategic review of the system and proposed establishing an HMRC Charity Tax Forum working group to look at the “cumulative financial burden” on charities.
06 November – Third Sector Former chairman of the Inland Revenue, Sir Nicholas Montagu, will lead a group set up by the National Council for Voluntary Organisations to make recommendations to government on how it might reform the charity tax system.
The commission, which was announced earlier this year, will carry out a full review of the charity tax system and the estimated £3.7bn worth of charity tax reliefs, then submit recommendations for reform to the government.
John Hemming, chair of the Charity Tax Group, said the commission “offers a further opportunity to challenge the anomalous tax position charities often find themselves in, particularly in respect of VAT”. It is essential that charity tax reliefs keep up with societal and technological developments, or they may become obsolete. We look forward to working with the commission and recommend that future-proofing tax reliefs for charities be one of its major areas of focus.”
06 November – Civil Society Charity representatives have expressed concern after the Office for Tax Simplification (OTS) recommended a comprehensive review of VAT zero-rates. OTS, an independent office of the Treasury set up in July 2010, has announced details of its first review of VAT, due to be published in full on 7 November. […] Charity Tax Group (CTG) chair John Hemming said the review of reduced rate and zero-rates “sounds like bad news”. “It is unlikely that they are going to expand reduced rates and zero-rates.”
20 October 2017 – Civil Society Charities have been warned that they may have to comply with Making Tax Digital regulations despite voluntary organisations being given an exemption. […] Richard Bray, Vice-chair of the Charity Tax Group said there remained a “tremendous lack of clarity” over the regulation and said the Charity Tax Group, were still in discussions with HMRC about it.
29 March – Civil Society Charities plead with HMRC to exempt trading subsidiaries from digital filing […]. Speaking at the Charity Tax Group’s annual tax conference, Ted Comerford, head of the customer readiness and stakeholder engagement team at HMRC, faced repeated questions about the value of including charity subsidiaries in the Making Tax Digital initiative.
29 March – Third Sector Graham Elliott tells the CTG’s annual tax conference that the sector should not expect the tax system to be reformed to its advantage when the UK leaves the European Union. Charities should be prepared to defend their existing VAT exemptions and zero rates after the UK leaves the European Union rather than simply assuming VAT will be reformed to their advantage, according to Graham Elliott
07 March – The Guardian […] Experts believe charities may benefit from a decision by a tax tribunal to allow Durham cathedral, an “ecclesiastical corporation” with the same tax status as a charity, to reclaim the bulk of the £6,720.25 it paid in VAT when it carried out minor works on Prebends Bridge, which spans the river Wear in Durham. Graham Elliott, technical adviser to the Charity Tax Group, which represents some 500 member charities, says the significance of the case is less the decision – it does not set a legal precedent – but more the fact that HMRC did not seek to challenge the basis of the cathedral’s argument.
15 February – Civil Society The charity sector is facing a business rate bill of just under £350m in the current financial year, rising to just over £390m next year, according to figures released today by the Department for Communities and Local Government. […] Business rates are the third largest tax the charity sector pays, after VAT, which is valued at around £1.5bn, and National Insurance, which is valued at over £2bn, according to figures collected by the Charity Tax Group. The CTG has previously estimated that charities pay around 6 per cent of their income in tax.
14 February – Civil Society A proposed new land tax could prevent the construction of new buildings for charitable purposes, and sector bodies should be given an exemption, a group of charity infrastructure bodies has said.
13 February – Third Sector A review of the community infrastructure levy, which is a tax on certain types of development in England and Wales to fund infrastructure expenditure and from which charities receive an exemption, recommends replacing the scheme with one that would grant “no (or very few) exemptions”. The Charity Tax Group […] have today criticised the report, which they say overlooks the current exemptions for the charity sector in the CIL.
06 February – Civil Society The Charity Tax Group has backed changes to the rules about how much benefit charities can give to donors and still claim Gift Aid, following a government consultation. HM Revenue & Customs and HM Treasury consulted last year on Gift Aid donor benefit rules, which currently have a number of thresholds governing how much benefit donors can receive from charities before their donations are no longer eligible for tax relief.
01 February – Civil Society The government has said it will exempt charities from new requirements to file digital tax returns every quarter, but trading subsidiaries will have to follow the new rules.
HM Revenue & Customs conducted the Making Tax Digital consultation last year, which included proposals to require all organisations to maintain digital tax records. The Charity Tax Group and other charity tax experts lobbied for the charity sector to be exempt from new rules.
23 January – Civil Society The Charity Tax Group has called on the government to tackle the issue of irrecoverable VAT by extending refund schemes for charities in its submission to the Chancellor ahead of the Budget. The CTG also called for a review of Insurance Premium Tax, reinstatement of Research and Development Credit as a relief for non-university charities, and exemption for charities from digital record-keeping.
23 November – Civil Society Autumn Statement – The Charity Tax Group said it was concerned about the increase in the impact that the increase in the insurance premium tax could have.
16 November – Civil Society […] Charity Tax Group say the [Gift Aid Small Donations] Scheme has not been successful because government introduced so much red tape in order to counter fraud that the relief is hard to use.
26 October – Civil Society HM Revenue & Customs is consulting on proposals to require organisations to maintain digital tax records and submit them using software or apps that are compatible with HMRC’s own. The requirement to file “at least quarterly”, with the ICAEW could increase businesses’ administrative burden. The Charity Tax Group told Civil Society News that government ministers are minded to grant an exemption for charities, but need to see sufficient support for doing so.
17 October – Civil Society The Charity Tax Group has called for a “dramatic review” of how the system of taxes and reliefs apply to charities “to identify duplication and over layering of regulations”.
6 October – Third Sector The Charity Tax Group’s response to HMRC’s consultation on Gift Aid raises concerns about the introduction of an annual statement, saying that although increasing donors’ understanding of Gift Aid was welcome, “we still have reservations about whether the introduction of a mandatory annual statement is the most effective way of achieving these goals”.
6 October – Civil Society The Charity Finance Group and Charity Tax Group have expressed concerns about some of the key proposals to make it easier for donations through intermediaries to attract gift aid, in response to a consultation which closed yesterday.
16 September – Civil Society Small Charitable Donations Bill does not go far enough, say charities — Charity representative bodies have said they will be pushing the government to strengthen a bill to amend the Gift Aid Small Donations Scheme.
15 August – Civil Society The Charity Tax Group and the Charity Finance Group have called for a delay to the apprenticeship levy’s introduction to allow charities more time to push for alternative proposals.
9 August – Charity Times The Charity Tax Group has called for a delay to the implementation of the Apprenticeship Levy to provide sector organisations time to prepare for the new initiative. CTG chair John Hemming has written to Minister of State for Apprenticeships and Skills Robert Halfon highlighting concerns over the extent to which the levy can be utilised by the sector in its current form.
1 July – Third Sector CTG has called for changes that would improve access to the Gift Aid Small Donations Scheme and said the maximum eligible donation should be increased in line with the £30 contactless maximum. John Hemming, chair of the CTG, said he hoped the changes would increase accessibility.
30 June – Third Sector CTG has welcomed the increases in Gift Aid paid out to charities, but raised concerns about the future of VAT reliefs after the EU referendum vote. A spokesman for the CTG said: “With the future of the VAT system under scrutiny after the EU referendum, the CTG calls on the UK government to make a clear commitment to preserve the invaluable VAT reliefs enjoyed by charities and consider structural reform of the VAT system to remove the distorting effects of irrecoverable VAT.
1 June – Third Sector The Charity Tax Group says reform of the Gift Aid Small Donations Scheme is needed. “While the scheme provides very useful relief – particularly for smaller charities – positive changes are required to improve uptake, which is still too low, and improve accessibility,” a spokesman for the CTG says. “We will continue to work with officials to improve guidance and ensure that there is less complexity for charities.”
24 May – Third Sector – John Hemming, chairman of the Charity Tax Group, said the IEA’s comparison between Oxfam’s use of Gift Aid and tax avoidance was entirely unfair. “The point with both of these arrangements is that they are agreed, sanctioned and promoted by HMRC,” he said. “The tax guidance for charities contains sections explaining how to do it. The accused charities are using the rules exactly as intended. The same can’t be said of people who use tax havens.”
3 May – Civil Society Alana Petraske, special counsel at Withers, told the Charity Tax Group’s annual conference last week that Common Reporting Standard (CRS), which is applicable to charities, is “potentially going to have quite an onerous impact on some charities, but not on all”.
3 May – Civil Society After the government announced plans in the last Spending Review and Autumn Statement to introduce an apprenticeship levy from April 2017, Damian Hinds, exchequer secretary to the Treasury, told delegates at the Charity Tax Group’s annual conference: “I urge you to continue working with us on this to help make the levy a success for the charity sector, as for other sectors. To help with that we’ve arranged a point of contact for you in the Department of Business Innovation and Skills to ensure that the voice of charities is heard as the work on the levy continues.”
29 April – Third Sector At the CTG annual conference the Minister was asked by Jane Crumpton-Taylor, director of finance and administration at World Horse Welfare, how departure from the EU might affect charity tax regulations. The Minister said it was still unknown what specific tax regulations, such as the VAT system, would look like in the event of the UK voting to leave the EU on 23 June. But he said the level of donations was dependent on the UK’s economic fortunes and the Treasury’s view was that the UK would be worse off if it left the EU.
29 April – Civil Society Addressing the Charity Tax Group’s annual conference yesterday, Tony Johnson, a senior technical adviser at HMRC, explained that the new guidance on digital gift aid, produced following a dispute with JustGiving over whether charities could claim gift aid to donations on its website signed off with messages of support by more than one person, had been down to a “miscommunication” and that the guidance had been produced as a response.
21 April – Civil Society – John Hemming, chair of the Charity Tax Group, said he was pleased that the consultation [on the Gift Aid Small Donations Scheme] includes “a number of the key recommendations in CTG’s response to the call for evidence, including: a partial relaxation of the gift aid history requirement; clarification of the community buildings rules; and steps to future-proof the Scheme to accommodate new types of small donations”.
6 April – Civil Society The Charity Tax Group said it had hoped HMRC would publicise the new model declaration more widely, and remains concerned that some smaller charities may still be unaware of the changes.
3 March – Third Sector The Charity Tax Group has also issued its consultation response, which calls for renewed efforts to improve awareness of the GASDS, more accessible guidance and claiming processes, and a relaxation of the Gift Aid history eligibility requirement to improve take-up, particularly among smaller charities.
3 March – Civil Society Richard Bray, vice chair of the Charity Tax Group, said: “This review offers the Government the opportunity to introduce measures that will increase the number of charities making use of the Scheme. But this will require greater flexibility in the application of the eligibility criteria and less complexity in the administration of the Scheme”.
26 November – Third Sector John Hemming, chairman of the Charity Tax Group, said: “The partial exemption for charities from the close company loans to participators rules, on which we lobbied the Treasury, is very welcome – it was a clear example of charities being caught inadvertently.”
25 November – Third Sector John Hemming, chair of the CTG, said the fact the government was actively seeking to abolish the tampon tax and was allowing sixth form academies to avoid VAT indicated there “may be room for negotiation on new zero rates (including possibly charity zero rates) in the ongoing European negotiations”. The CTG has long been campaigning for charities to be required to pay less VAT.
20 November – Third Sector The Charity Tax Group warned that the new warning could have a “chilling effect on some donors” but said it recognised the importance of Gift Aid being operated correctly.
19 November – Third Sector Richard Bray, vice-chairman of the Charity Tax Group, took part in the discussions with HMRC over the changes to the guidance. He is pleased that charities are no longer obliged to make up any shortfall and that donors therefore have an incentive to ensure they are eligible before they sign up.
11 November – Civil Society The CTG and CFG also asked why charities were included in the proposals, when the consultation looks directly at businesses. In a joint statement they said: “Given that the whole thrust of the consultation is about ‘business energy’ and improving the efficiency and competitiveness of UK businesses, we question what was the policy objective of including charities in this regime given that they are not businesses in the traditional sense.”
28 October – UK Fundraising John Hemming, chairman of the Charity Tax Group, which is a member of the Working Group, commented: “We will also continue to work with officials to ensure that the Gift Aid Declaration is as flexible as possible for use on digital platforms, including SMS, where take-up is still too low.”
22 October – Civil Society CTG chair John Hemming said that in addition to concerns about the new passage, there are other challenges to be overcome. He said: “More needs to be done to promote awareness of this change, to ensure that charities are compliant with the new gift aid declarations and do not face the prospect of invalid claims.”
12 October – Civil Society The CTG has said that the review should have the close involvement of charities and charity advisers, with a “particular focus being given to the ‘in consequence’ rule”.
12 October – Third Sector The Charity Tax Group has called on the government to carry out a full review of Gift Aid donor benefits guidance with advice from charities. It says there should be a particular focus on the “in consequence” rules, which cover benefits received by donors that they might not have been given had they not made donations.
7 October – The Guardian Charity Finance Group, alongside NCVO, the Institute of Fundraising and Charity Tax Group, wrote a response to the previous government’s consultation on business rates earlier in the year.
6 October – Civil Society John Hemming, chair of the CTG, said: “A clear statement confirming that charity business rates relief will not be affected by this policy would help to allay concerns in the sector that this policy announcement could threaten this invaluable relief.”
28 September – Third Force News The Scottish Council for Voluntary Organisations (SCVO), with the support of the UK Charity Tax Group, has now pushed this issue to the top of the agenda with the Scotland bill. UK ministers had initially positioned this as a “wait and see” problem but are now putting this nearer the top of the Treasury’s in-tray.