CTG Newsletter – 11 April 2017
Instant “charity tax updates”
Website users will now be able to opt-in to receive certain “charity tax updates” as soon as they are posted. Today’s update on the new HMRC charitable giving helpsheet was an example of this.
The newsletter will still be sent regularly and provide a round-up of all stories on the website, but users can now opt-in for instant updates (which will apply to technical tax updates, rather than general news/events updates).
To check the status of your account and decide which topics you wish to receive instant “tax updates” on, please go to https://www.charitytaxgroup.org.uk/my-account/ . This includes the option to opt-in to all updates (which may already be the default setting).
CTG meeting with the OTS VAT Review team – feedback requested
CTG representatives will be meeting officials from the Office of Tax Simplification (OTS) later this month to discuss their ongoing VAT Review. The main focus areas are:
- Identifying the implications of a high registration threshold.The UK VAT registration threshold, at £83,000, is much higher than most other countries’ (generally closer to £20,000 across all countries with a VAT system or equivalent). This influences and distorts business behaviour. Would it be less distortive if the UK’s threshold were lowered to bring in more businesses? If so, how would those small businesses cope? What would be the impact of raising the limit to remove more businesses from VAT? Or could the ‘cliff edge’ of registration be managed better?
- Multiple rates: Causes of complexity. The UK currently has in effect four different VAT rates: the standard 20% rate, the 5% reduced rate, a zero-rating, and exempt goods and services. The definitions—and practical application of definitions—of items within each rate cause a lot of complexity. How might this be simplified?
- Partial exemption, option to tax and capital goods scheme. These have been raised as some of the most complicated areas of VAT. Many more businesses now seem to be affected. Can they be simplified? Or are there ways to amend them to reduce their range and impact?
- Special Accounting Schemes. There are several schemes, including the flat rate scheme, retail schemes, tour operators margin scheme and annual accounting scheme, generally designed to simplify the VAT regime. Business practices and technology have changed significantly since they were designed, so are these schemes working appropriately today? Do they need improving – or are any in fact no longer needed?
- VAT and Making Tax Digital (MTD). HMRC’s MTD plans encompass VAT so that brings opportunities and risks. Which areas of the VAT regime need to be simplified to better fit into MTD? And what simplification could MTD bring to the VAT regime – how would the special accounting schemes be affected?
The OTS is looking for CTG to present solutions as well as identifying obstacles in the current system. We would welcome feedback from members to these specific questions as well as thoughts on ways any broader VAT issues could be resolved. Please send any feedback to info@charitytaxgroup.org.uk by 20 April 2017.
HMRC charitable giving helpsheet 2017
HMRC has updated its charitable giving helpsheet (HS342), which tells donors about four of the tax reliefs for giving to charity: Gift Aid; Gifts of shares and securities to charity; Gifts of real property to charity; and Payroll giving.
Company Tax Return (CT600) 2017 guide published
HMRC has published the 2017 edition of its guide on completing a Company Tax Return (CT600). CT600E (pages 41-43 of the guide) is the relevant form for Charities and Community Amateur Sports Clubs (CASCs), while organisations giving to charities or CASCs should refer to s305 of the guide Qualifying donations. Please also join the conversation on the software you use to file your charity trading subsidiary tax returns and charity accounts.
Museums and Galleries Tax Relief
The Arts Council has published a guidance pageon its website in respect of the new Museums and Galleries Tax Relief. The website, including links to HMRC, breaks down the relief into four sections: What is it?; Can I qualify?; What exhibitions are eligible?; What costs are included and how do I claim?
Report finds increase in Gift Aid take-up
The Charities Aid Foundation (CAF) has published its Annual UK Giving report, which identified a number of important individual giving trends in 2016. The report also found that (based on the sample) of those who donated money to charity, over half (52%) said they used Gift Aid on their donation, a higher level than 2015 (47%) with those aged 25-44 (60%) being the far most likely age group to have done so. This age group consistently comes out as the most likely to utilise Gift Aid, likely due to their levels of employment and taxable income, which makes them eligible for Gift Aid. A more detailed summary of the report can be found here.
HMRC Employer Bulletin
HMRC has published the April edition of its Employer Bulletin, which includes updates on recent payroll related news, including PAYE processes, expenses and benefits claims, Apprenticeship Levy and tax relief for employers.
Consultations and case law 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.
CTG’s VAT case law tracker can be accessed here.
CTG Newsletter Archive
Members can catch up on CTG’s recent newsletters using the links below:
CTG Commentaries
Read our expert commentary pieces and leave your comments and queries:
Please contact us at info@charitytaxgroup.org.uk if you would be interested in contributing a commentary piece.
CTG website
Do you have colleagues/friends in other charities that would benefit from receiving CTG’s newsletters? If so, please share this link to a page with full details about membership. Thank you again for supporting CTG in 2017.
Charity and Observer Members are reminded that their membership is on an organisational basis and that there is no limit of the number of subscribers to the website per organisation. If you think a colleague would benefit from getting access to the website and newsletters directly, please encourage them to register online at www.charitytaxgroup.org.uk/join-us/ selecting your organisation from the drop-down box.
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