CTG Newsletter – 25 May 2017
31 May 2017 deadlines
Common Reporting Standard submissions
HMRC has published a reminder that the deadline for submitting Automatic Exchange of Information (AEOI) returns for the year ended 31 December 2016 is 31 May 2017. The Association of Charitable Foundations has compiled a useful summary of the steps affected charitable trusts need to take (charitable companies are not required to report as they are not regarded as “Account holders”). HMRC’s detailed guidance for charities can be read here. Alana Petraske’s helpful blog outlining her top 10 tips for charities affected by CRS can be read here.
HMRC has indicated that if reasonable steps have and are being made by charities to comply with the CRS filing requirements, but it will not be possible to make the deadline, these charities should contact HMRC. We have been told that HMRC will apply a light touch approach to compliance by charities with CRS reporting and they will not seek to apply penalties where charities have made efforts to carry out due diligence requirements and report accurately. However, this approach is contingent on early communication with HMRC. If a charity is still in any way uncertain as to its status in relation to the CRS, we would encourage them to seek professional advice and/or HMRC to make certain of their situation and any reporting requirements.
We would welcome feedback from you on whether you have been able to meet the 31 May 2017 deadline, and, if not, what your experiences with HMRC have been like to date. Please send any comments to info@charitytaxgroup.org.uk
Retail Gift Aid – end of year letters
As outlined in the last newsletter, charities or their trading subsidiaries using the ‘Method A’ process for applying retail Gift Aid, or for trading subsidiaries using ‘Method B’, are reminded that end-of-year letters/emails need to be sent out to donors by 31 May 2017. Further information is available here. This is not relevant for charities and trading subsidiaries that use the Standard Method for applying Retail Gift Aid.
Apprenticeship Service accounts active
Online further education magazine FE News has published an article reminding organisations that pay the Apprenticeship Levy that they should have begun to receive the first payments of levy funds to their apprenticeship service accounts. This first amount should equate to 0.5% of the organisation’s monthly paybill, plus a 10% top-up from the Government. Funds can be spent on accredited apprenticeship training in England and must be used with the next 24 months – unspent funds will be redistributed to organisations with extra capacity to offer apprenticeships. If you have begun paying the Apprenticeship Levy but do not yet have an apprenticeship service account, you should register for an account to be able to access your funds. Further information can be found here.
Civil Society recently reported that the disability charity United Response has announced an intention to create 400 apprenticeships so that it can claim some of its money back from the Apprenticeship Levy. The charity has appointed Interserve Learning & Employment (ILE) to provide the level 2 and 3 health and social care apprenticeships and will launch its own leadership programme later this year. CTG would be very interested in hearing from members affected by the Levy as to whether they are putting similar programmes in place or whether they are simply treating the new Levy as an additional payroll tax, with limited opportunities to claim back contributions towards apprenticeship costs.
Office of Tax Simplification (OTS) VAT review
CTG representatives recently met OTS officials to discuss their ongoing VAT review. The OTS officials confirmed that the project had evolved since its inception and was now very much intended to contribute to the Government’s thinking on VAT in the post-Brexit landscape. This enabled the Review team to look at policy issues, as well as pure administrative simplifications, although this was limited to the extent that the policy reforms in question would alleviate complexity of administrative obstacles. This presents an important opportunity for CTG to demonstrate the value of simplifications to address the historic VAT obstacles facing charities.
As part of this process, CTG has been asked by OTS to give specific recommendations relating to simplification of the Schedule 8 zero rates, as well as feedback on issues including VAT registration, Partial Exemption, TOMS, Making Tax Digital Capital Goods Scheme and VAT rulings and penalties.
The deadline for responses to the OTS VAT review is 30 June 2017, but CTG is aiming to submit its response by early June in order to leave sufficient time for follow-up meetings with OTS officials. If you would be interested in contributing to this consultation response and finding out more about the discussions to date, please contact us at info@charitytaxgroup.org.uk.
Taxes relevant to different activities undertaken by charities
The CTG website allows users to navigate the tax system based on the types of activities undertaken by different charities. The table below lists the activities currently included on the website. These sections continue to be developed, so please let us know if you have any suggestions for new activity categories and additions to the existing pages by contacting us at info@charitytaxgroup.org.uk . Additional information about navigating the CTG website can be found here in this commentary by CTG Chairman John Hemming.
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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
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CTG Commentaries
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Please contact us at info@charitytaxgroup.org.uk if you would be interested in contributing a commentary piece.
CTG website
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