CTG Newsletter – 22 June 2017

Queen’s Speech 2017

The Queen outlined the forthcoming legislative agenda for the Government in her speech to Parliament yesterday. The Government has previously announced that there will be no Queen’s Speech in 2018 in order for the necessary legislation for the process of Brexit to be debated in full. Full text of the speech and background briefs on each of the Bills proposed for the 2017-19 session, can be read here.

The Bills most likely to be relevant to CTG members include:

• Repeal Bill
• Customs Bill
• National Insurance Contributions Bill
• Data Protection Bill
• Courts Bill

The 2017-19 programme will also include three Finance Bills to implement budget decisions. Summer Finance Bill 2017 will include a range of tax measures including those to tackle avoidance. The programme will also include a technical Bill to ratify several minor EU agreements and further Bills, which will be announced in due course, to effect the UK’s withdrawal from the EU. The Government will also be taking forward a range of other measures which may not require primary legislation.

The Government will work with technology companies, charities, communities and international partners to develop a Digital Charter, making sure it is underpinned by an effective regulatory framework

The Government has also stressed that, along with local authorities, the wider public sector, charities, commercial organisations and civil society they all have a role in supporting the Armed Forces community, through the Armed Forces Covenant. This includes support to veterans in the areas of employment, healthcare, housing, education, and financial advice.

Feedback from the HMRC Charity Tax Forum

A number of CTG representatives attended the HMRC Charity Tax Forum meeting yesterday. Updates  of note included:

• There is no further update on if/and when HMRC will publish the proposed consultation on the tax exemption for Employer Provided Living Accommodation. See here for further details.
• There is no further update on when the Museums and Galleries Tax Relief will be introduced. The measure was dropped from the Finance Bill 2017, but is still expected to be introduced at some point in the future. See here for background information.
• HMRC will be publishing new Gift Aid research later this summer, which will focus on the extent to which those eligible to use Gift Aid do not use it and those not eligible for Gift Aid do use it. This research will help to inform further work on simplifying the Gift Aid process and improving donor education
• A Gift Aid Review working group is to be set up and HMRC will be welcoming feedback and involvement from across the charity sector, and especially from smaller charities. This group is likely to look at ways to improve eligible take-up of Gift Aid, promotion, higher rate relief etc. We will share more information about this as we get it
• HMRC and HM Treasury officials are analysing the responses to the Gift Aid donor benefits consultation, but cannot confirm exactly when a Summary of Responses will be published, as this is subject to discussions with the new Minister. There will still be a separate working group (either as part or alongside the Gift Aid Review working group) to look at other important donor benefit issues including the interpretation of the in consequence rule, the valuation of benefits and the operation of the split payments rules
• There will be a new working group on the cumulative burden of tax policy on charities. This will look at all the taxes relevant to charities, as well as the associated administrative burdens. Again, HMRC is keen to engage a wider charity sector audience and to reach stakeholders across the country, and we will share more information with you once it has been announced
• There will be a new Deputy Director responsible for charities policy at HMRC, Jo Gibson (formerly head of pensions policy at HMRC). She will replace Rachel Nixon, who some of you may have met.

Charity Commission to tackle business rates avoidance

The Charity Commission has signed a series of Memoranda of Understanding (MOUs) with three Local Authority bodies, as part of a pilot programme of information sharing aimed at tackling instances of business rates avoidance. The agreements, signed with Oxford City Council, Broxbourne Borough Council and the Kent Intelligence Network, will enable the Commission to carry out coordinated operations with these bodies to look into people or organisations engaging in business rates avoidance. This includes situations where, for example, a landlord might rent out a commercial property to a charity at a very low rate, in order to take benefit from the 80 per cent mandatory business rates relief, which might otherwise have to be paid if the property remained empty.

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.

• Ongoing – Assessment of recent Gift Aid changes (including Charities Online, new Gift Aid Declaration and new Retail Gift Aid methods) (CTG)
• Ongoing – Insurance Premium Tax survey (CTG)
• Ongoing – Discretionary Charity Business Rates Relief (CTG)
• 30 June 2017 – VAT review (Office for Tax Simplification)
• 10 July 2017 – Taxation of employee expenses call for evidence (HMRC)

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 Newsletter – 20 June 2017
• CTG Newsletter – 15 June 2017
• CTG Newsletter – 9 June 2017
• CTG Newsletter – 1 June 2017
• CTG Newsletter – 30 May 2017
• CTG Newsletter – 25 May 2017
• CTG Newsletter – 22 May 2017

CTG Commentaries

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

• Definition of a ‘sport’ for VAT purposes – new AG opinion (Graham Elliott) NEW
• Business rates valuations for museums (Colin Hunter) NEW
• 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)
• Holding companies are required to raise management fees in order to ensure VAT recovery (Dermot Rafferty)
• 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.

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.