CTG Newsletter – 1 June 2017
First experience of submitting a Common Reporting Standard (CRS) return – how did you find it?
The deadline for submitting Automatic Exchange of Information (AEOI) returns (under the Common Reporting Standard rules) for the year ended 31 December 2016, was 31 May 2017. CTG has worked with charitable trusts to help them understand whether they need to undertake these reporting requirements and has encouraged feedback from members on their experiences with this first submission.
This new commentary recounts the experience of two charity members. Unfortunately, overall, the process was not a particularly rewarding one and has raised important questions about the value of affected charitable trusts having to undertake this process, given the resources required to submit relatively limited information. The guidance also appears to be in need of improvement to ensure that charities have the information they need before they sit down to complete the submission.
We would welcome feedback from other charities on their experience of submitting their CRS returns (and this can be on an anonymous basis if preferred).
Insurance Premium Tax increases to 12%
Insurance Premium Tax increased to 12% on 1 June 2017, up from 10%, and having been as low as 6% in October 2015. CTG has argued that this has a disproportionate impact on charities (especially those with a large portfolio of operational buildings and extensive transport and travel commitments) and expressed have serious concerns about rumours that IPT may eventually be increased to 20%, in line with VAT.
The last Government ruled out any exemption for charities on the basis that it would not be practical (and that insurers do not have to pass on the cost) and have noted that it is an important revenue raiser. CTG will continue to press Government for greater protection for charities and would ask all affected charities to complete our IPT survey so that we can demonstrate the impact of the increase.
Reduced VAT rate for e-publications approved by European Parliament
An EU Commission proposal to enable Member States to charge a reduced rate of VAT on e-books – bringing them into line with VAT levied on printed matter – has been endorsed by the European Parliament by 590 votes to 8, with 10 abstentions. Currently, e-books have to be taxed at an EU minimum standard rate of 15%, whereas Member states are free to charge the reduced rate of at least 5% — and in some cases like the UK, even zero-rates — on printed publications.
CTG has welcomed this helpful development, which we proposed in a response to a Commission consultation last year. The proposed Directive requires unanimity for adoption by the Council, after this consultation of the European Parliament.
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