CTG Newsletter – 15 March 2017

Reminder of forthcoming tax and finance changes

28 March 2017

The new £1 coin will enter circulation. It is important that all round £1 coins are returned – either by being spent or directly to the bank – before 15 October 2017 when they lose their legal tender status.

1 April 2017

New rules for VAT relief on substantially and permanently adapted motor vehicles for disabled wheelchair users will become effective. Further information can be found here.
The VAT registration threshold will increase to £85,000 from £83,000 and the deregistration threshold will rise from £81,000 to £83,000, announced by Chancellor Philip Hammond as part of the spring Budget
The rates of the National Minimum Wage will increase. The rate for workers aged 25 and over (the national living wage) increases from £7.20 to £7.50. The rates within the other age bands also increase.
The Museums and Galleries Tax Relief, introduced in Finance Bill 2017, will become effective. The rates of relief will be set at 25% for touring exhibitions and 20% for non-touring exhibitions and the relief will be capped at £500,000 of qualifying expenditure per exhibition.

6 April 2017

New off-payroll working rules for public sector employers come into force. While most charities will not be affected ‘Public sector’ has a wider definition than most might think and does include a number of charities. HMRC has opened the new Employment Status service for checking if a worker on a specific engagement, should be classed as employed or self-employed for tax purposes. See Susan Ball’s popular commentary for further background information. We are keen to build up a picture of how many CTG members are affected by these rules – if you are please let us know at info@charitytaxgroup.org.uk.
Apprenticeship Levy payments will be collected by HMRC via PAYE from April meaning that organisations can expect to see funds in their apprenticeship service to be spent on apprenticeship training from May 2017. Affected charities can register for their own apprenticeship service account allow employers to financially manage their apprenticeship programme and help them to estimate their financial spend and recruit apprentices through training providers. We would welcome feedback from affected charity members (at info@charitytaxgroup.org.uk) on how your preparations for the Levy have progressed, and how much of your Levy contributions you expect to be able to utilise on training and how much will effectively be written off.
The provisions in the Small Charitable Donations and Childcare Payments Act 2017, will be effective. Further information on the implications for the Gift Aid Small Donations Scheme can be found here (including the extension to contactless payments, removal of the Gift Aid history requirements and changes to the community buildings rules). CTG has been working with HMRC officials to update the guidance, which we hope will be published before this date.
The provisions in the Donations to Charity (Gift Aid Declarations) Regulations 2016 will be effective, in relation to gifts after this date. Currently a donor has to complete a Gift Aid declaration (GAD) each time they give to a new charity when giving through an intermediary. The Regulations introduce a new process that allows a donor to give permission to an intermediary to create GADs on their behalf for all subsequent donations made in that tax year.
The Social Investment Tax Relief will be enlarged so that the amount of investment a social enterprise may receive under the SITR over its lifetime will be increased to £1.5 million. Full details are available here.
Benefits-in-kind attracting tax and NIC advantages when they are provided under a salary-sacrifice scheme, are to be limited in many cases. Further details are available here.

Chancellor reverses Budget decision to increase National Insurance for self-employed people

Plans to increase National Insurance levels for self-employed people – announced in the Budget last week – have been dropped. The Chancellor has said the Government will not proceed with the increases which were criticised for breaking a 2015 manifesto pledge to not increase VAT, Income Tax or National Insurance in this Parliament.

Minutes of the HMRC Charity Tax Forum – 5 January 2017

HMRC has published the minutes of the HMRC Charity Tax Forum meeting on 5 January 2017, at which CTG was represented. The meeting included discussion on the status of the Fit and Proper Persons Guidance (now updated), VAT, Gift Aid donor benefits (see CTG’s response to the consultation here), GASDS and Gift Aid and intermediaries.

EU Withdrawal Bill

The European Union (Notification of Withdrawal) Bill 2017 has passed through both Houses of Parliament, and is due to receive Royal Assent on 16 March 2017. The Bill was passed unamended after peers voted not to challenge the Commons again over the issue of whether Parliament should have a veto on the terms of exit. The House of Lords also agreed not to reinsert guarantees over the status of EU residents in the UK into the bill.

Insurance Premium Tax

Echoing her response to a series of parliamentary questions in January on the impact of the proposed Insurance Premium Tax (IPT) increase for charities, the Financial Secretary to the Treasury Jane Ellison has now responded to a written question stating that it would be challenging to implement an exemption for insurance purchased by any specific group.

We would encourage you to complete CTG’s Insurance Premium Tax survey so we can provide data on the cost of the increase on different charities.

Meetings tracker

28 March 2017 – Annual Tax Conference (Waiting list only)
4 May 2017 – Charity Tax Updates in Leeds

Consultations tracker

CTG will be preparing responses to a number of important consultations over the next few months. Our consultation responses rely on input from members and we would encourage you to send us your thoughts, and where relevant submit your own consultation response. The deadlines for forthcoming consultations are outlined below. Please send your feedback via the relevant consultation page on the CTG website or to info@charitytaxgroup.org.uk.

Ongoing – Insurance Premium Tax survey (CTG)
Ongoing – Discretionary Charity Business Rates Relief (CTG)
20 March 2017 – Review of VAT Rates (European Commission)
7 April 2017 – £300m discretionary rates relief fund (DCLG)

CTG Newsletter Archive

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CTG Commentaries

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