CTG Newsletter – 20 July 2017

Consultations

Given that there are not many formal Government consultations open at present, CTG would like to use this opportunity to collect feedback from members on a range of topical issues.

The information you provide is crucial to informing our representations to Government so please share any information you can via the relevant consultation page on the CTG website or by e-mailing info@charitytaxgroup.org.uk.

• Assessment of recent Gift Aid changes (including Charities Online, new Gift Aid Declaration and new Retail Gift Aid methods)
• Insurance Premium Tax survey : what is the financial implication for your charity of the recent increase to 12%
• Discretionary Charity Business Rates Relief: have you experienced any changes in reliefs awarded by Local Authorities?
• Making Tax Digital: how many of your charity trading subsidiaries have a turnover that exceeds the VAT registration threshold [£85,000]?

While the deadline for responses to the Office for Tax Simplification’s (OTS) VAT review closed at the end of June, officials have indicated that they will accept responses into July. CTG’s response can be read here.

The Government is expected to respond to the Gift Aid donor benefits consultation and CIL Review in the autumn. No formal confirmation has been received yet as to whether the Government will publish the planned consultation on employer provided living accommodation.

Website, newsletters and supporting CTG

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.

CTG relies on donations from its charity members to fund the work it does on behalf of the sector. If your organisation has not yet made a contribution to our work in 2017, please consider doing so – further information and a donation form can be found here.

Theatre Tax Relief

HMRC has published the first annual statistics for the Theatre Tax Relief.

• In 2016-17, £46 million of Theatre Tax Relief was paid out relating to 1,570 productions, of which 490 were touring and 1,080 were non-touring.
• Since Theatre Tax Relief was introduced in September 2014, £60 million has been paid out relating to 1,750 productions.

Theatre Tax Relief was announced in Finance Act 2014 and effective from 1 September 2014. Production companies (which can include charities and charity trading subsidiaries) are eligible to claim Theatre Tax Relief if:

• it is a qualifying production company engaged in the making of theatrical productions
• its primary focus is to play before a live audience of paying members of the general public or for educational purposes
• it has a minimum 25% EEA expenditure
• it has 2 rates of payable credit, 25% for touring productions, and 20% for others.

We would welcome feedback from charities and advisers as to whether they have made a successful claim, their experiences in doing so, and whether the claim was made via a charitable company or a trading subsidiary. Please send any comments to info@charitytaxgroup.org.uk.

Round up of other topical issues

• HMRC VAT Notice 700/45: how to correct VAT errors and make adjustments or claims has been updated to change the VAT Error Correction Team office address (section 4.1).

• HMRC has updated its VAT partial exemption toolkit and VAT input tax toolkit for 2016 to 2017, but there is no clear indication of what content has changed.

• Nicky Morgan (who earlier in her career was the Treasury Minister responsible for charity taxation) has been elected as chairwoman of the influential House of Commons Treasury Select Committee.

• Civil Society has reported a mixed response from the sector to the Charity Authorised Investment Fund (CAIFs). The  new structure will able to take advantage of a VAT exemption for FCA-authorised funds, meaning that VAT will not be payable on investment management fees, which was the case with predecessor CIFs. It is hoped that this will lead to significant savings for charities over time.

• The independent Civil Society Futures review has published four questions for consultation (until 5 September)
  • What purpose does civil society fulfil now? What purpose will civil society need to fulfil in the future? What do you think they should/should not be doing?
  • What is driving or inhibiting change in civil society? How will different forms of civil society respond to social, political, economic, environmental and technological change over the future?
  • What new forms of civil society do you see emerging now and why? Given the right circumstances, what might their impact be in the future?
  • How and in what ways can civil society enable human flourishing now and in the future? In what ways is civil society important for a healthy democracy?f

• The Law Commission has published a new consultation on the law of wills which will look to modernise the legislation so that it remains fit for purpose.

CTG Newsletter Archive

Members can catch up on CTG’s recent newsletters using the links below:

• CTG Newsletter – 14 July 2017
• CTG Newsletter – 11 July 2017
• CTG Newsletter – 5 July 2017
• CTG Newsletter – 29 June 2017
• CTG Newsletter – 22 June 2017
• CTG Newsletter – 20 June 2017

CTG Commentaries

Read our expert commentary pieces and leave your comments and queries:

• Iberdrola VAT case – A dilution of Sveda? (Dermot Rafferty)
• VAT recovery for holding companies – MVM case and HMRC guidance (Dermot Rafferty)
• Professional negligence and failed tax avoidance schemes (Sonia Ferreira)
• Definition of a ‘sport’ for VAT purposes – new AG opinion (Graham Elliott)
• Business rates valuations for museums (Colin Hunter)
• First experience of submitting a Common Reporting Standard (CRS) return (CTG)
• Construction of Relevant Charitable Purpose (RCP) buildings – position of sub-contractors (Les Howard)
• Supplies to local authorities – Healthwatch Hampshire VAT case (Graham Elliott)
• Brockenhurst College VAT case – implications for charities (Graham Elliott)
• Filing charity trading subsidiary tax returns and charity accounts (Justin Bevan)
• Adecco appeal on the VAT treatment of temporary workers dismissed (Graham Elliott)
• AG Opinions on the VAT cost-sharing exemption – implications for charities (Graham Elliott)
• Have you paid enough tax to cover your Gift Aid donations? (Kevin Russell)
• Off-payroll working: Major changes from April 2017 (Susan Ball)
• Update on “Economic Activity” and the fate of the Lord Fisher test (Graham Elliott)
• Durham Cathedral VAT case and Sveda – implications for charities (Graham Elliott)
• Hire fees for stalls at fairs – implications of the Kati Zombory-Moldovan case (Graham Elliott)
• Common Reporting Standard – Top 10 tips for charities (Alana Petraske)
• Charity Authorised Investment Fund (CAIF) launched (Grania Baird)
• Longridge on the Thames VAT case – implications for charities (Graham Elliott)
• Implications of Brexit for charity tax (John Hemming)
• Implications of the Hallé case for the philanthropic exemption (Graham Elliott)
• Helping you find your way – the new Charity Tax Group website (John Hemming)

Please contact us at info@charitytaxgroup.org.uk if you would be interested in contributing a commentary piece.