CTG Newsletter – 16 December 2016
OTS Review of VAT – Terms of Reference
In this year’s Autumn Statement, the Government announced that the Office of Tax Simplification (OTS) would be undertaking a review of VAT. Initially it appeared that the view would be fairly narrow and administrative in nature, with no review of the VAT rate structure. However, the Terms of Reference, which have just been published, suggest that the scope is wider than expected and covers some areas of particular interest, including:
- The opportunities available to align VAT more with other taxes (or vice-versa) as part of the Making Tax Digital plans
- The potential for simplifying the operation of partial exemption methodologies, the option to tax and the Capital Goods Scheme
- The extent to which the definitions of the types of supply which are currently exempt from VAT, subject to a reduced rate or are zero-rated, fit the modern context, create complexity for businesses and administration.
CTG’s VAT Expert Group will be seeking a meeting with the OTS team in early 2017 to discuss the implications of simplification for charities. Full details about the review can be found here.
Donations to Charity (Gift Aid Declarations) Regulations 2016
The Government has laid the Donations to Charity (Gift Aid Declarations) Regulations 2016. These Regulations have effect in relation to gifts made on or after 6th April 2017. 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. They also impose record keeping requirements on charities and donor intermediaries and require donor intermediaries to provide statements to donors. The Regulations will increase the required cumulative donation level to trigger an Annual Statement from £5 to £20 per year, as suggested in CTG’s consultation response. Intermediaries will also have greater flexibility in the way they contact donors about the Annual Statement. Unfortunately the Government appears committed to requiring donors to give a positive affirmation of their Gift Aid eligibility each year, rather than the preferred option of passive confirmation. Further information can be found here.
Apprenticeship Levy
Draft regulations
HMRC has published another set of draft regulations, which make further provision for the calculation, reporting, payment and recovery of the Apprenticeship Levy. The Government has also opened a technical consultation on the regulations, with responses due by 3 February 2017.
Guidance note
HMRC has published useful guidance which provides useful information for affected employers on when they have to pay the Apprenticeship Levy and how to report payments. While it does not cover any new aspects of the policy, it bring all the relevant information on Levy payments together in one place.
Local Charities Day
Local Charities Day is taking place today (16 December 2016) and celebrates small, local charities and community groups demonstrating the great work they do in their areas. The Minister for Civil Society encourages citizens to donate to local good causes through Localgiving’s ‘Grow Your Tenner’ campaign, which launches today with £245,000 match funding from Government. Legislating the Small Charitable Donations Bill has also been referenced as a support for local charities, by the Government.
Scottish Budget 2017-18
The Scottish Government has published its Draft Budget for 2017-18 indicating its tax and spending proposals for the next year, including references to the funding of OSCR and the allocation of income received from the UK Government from the Apprenticeship Levy.
In the Budget, the Scottish Government confirmed that it would not replicate the UK Treasury’s tax cut for higher earners. The 40% threshold of higher rate tax will only rise by inflation, to £43,430 in Scotland. The higher tax rate will start at £45,000 elsewhere in the UK. In practice this will mean that people will have to earn less in Scotland to be eligible for higher rate relief on Gift Aid.
Consultations tracker
CTG will be considering responding 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 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.
|
