CTG Newsletter – 17 November 2017
Charity Tax Updates in Cardiff and Manchester
The presentation slides from yesterday’s Charity Tax Update in Cardiff, in association with Deloitte, can be downloaded here. The session included a presentation by Steve Carroll, from HMRC’s Charities Outreach team, who looked at recent Gift Aid updates including the work being done to improve donor education around Gift Aid and online fundraising. Other topics covered included a review of recent VAT case law, VAT reform, Making Tax Digital and business rates.
A similar seminar, also with speakers from HMRC, is taking place in Manchester on Monday 27 November 2017, in association with EY. You can register for this free event here.
Relaxation of MTD digital automation requirements?
HMRC’s approach to Making Tax Digital (MTD) continues to evolve (almost on a weekly basis at the moment!).
Our original update gave HMRC’s confirmed position at the time of our meeting, which was a requirement for data transfer by digital links, but since then HMRC has written to us to say it is looking at the practical difficulties we described about automating the gathering and transferring of relevant figures from spreadsheets that contain data relevant to the VAT declaration. HMRC stated “this is a much broader issue and is likely to be relevant for any large organisation with disparate/old systems. We are currently finalising some parameters here and will provide a broader update on this before the end of the year”.
We also understand that these practical difficulties were discussed at recent meetings between HMRC and the Chartered Institute of Taxation (CIOT) with the Institute told “the export of figures from software into spreadsheets (to calculate adjustments) will not be required to be performed electronically. A manual transfer of data in and out of the MTD compatible software is acceptable.” It is understood that HMRC will confirm exactly what this means by writing to CIOT, and we will inform you once this becomes available to us.
On the face of it, data would appear, therefore, to be transferable to the digital account by means of copying spreadsheet cell contents between accounting records, or even (perhaps) typing a relevant figure into those records, but still requiring a digital upload to HMRCs system using “functional compatible software”. However, the real scope of this policy may well evolve over time. We hope that this represents a realistic assessment by HMRC of the extent to which VAT accounting can be made truly digital, given the tax’s complexity.
Other topical developments
- Charities Online: service availability updates: HMRC has published a page on Gov.uk which will flag service availability issues for the Charities Online service, used to submit Gift Aid and GASDS claims. This follows reports that some customers are experiencing delayed submission responses. If you are encountering any problems with Charities Online, please let us know at info@charitytaxgroup.org.uk.
- Civil Society Strategy announced: The Minister for Civil Society, Tracy Crouch MP, has announced the launch of a new Civil Society Strategy. She said that the “Strategy will provide an opportunity to explore ways to build new partnerships within and between sectors and communities, so that we can better mobilise resources and expertise and find practical new solutions to the problems we face. It will reaffirm the value that government places on civil society. It will explore what more Government can do to support its work”. While this review will not relate specifically to tax issues, it could be an important opportunity to highlight the necessity of intra-governmental/departmental liaison to ensure that the implications of new legislation for charities is understood as well as an opportunity to highlight improvements to the VAT treatment of commissioning of services by local and central Government bodies to charities.
- VAT registration: HMRC has published a combined quantitative and qualitative study examining why small businesses register for VAT and their perceptions and experiences of doing so.
- Charity audit: The Financial reporting Council (FRC) has today issued a revision of Practice Note 11: The audit of charities in the United Kingdom.
- Employment status: In the latest round of litigation relating to the “gig economy” Uber has lost its appeal against the finding that Uber drivers are workers rather than self-employed. While this case has no direct relevance to charities, once this litigation has been resolved (which is unlikely to be for some time yet, with the decision almost certain to be appealed) it could have significant implications for employment taxation. A detailed case note can be read here.
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