CTG Newsletter – 29 June 2017
CTG response to the OTS VAT Review
Following a meeting with the OTS Review team, and consultation with members, CTG has now submitted a detailed response to the Call for Evidence. In the response CTG welcomes the efforts being made to reduce unnecessary bureaucracy and to simplify the VAT system. However, we have noted that it is important that this process does not result in inadvertent costs for charities and there is no removal of the invaluable zero rates charities benefit from.
CTG has identified this Review as an important opportunity to address long-standing structural obstacles facing charities in the VAT system, be that through the introduction of a special refund scheme for charities in relation to their non-business activities, or by extending the existing reduced and zero rates on supplies to charities to cover all supplies to charities in addition to the reduced rate for supplies by charities.
The CTG response also comments on the specific technical and practical questions raised in the review, on topics including partial exemption, VAT registration threshold, guidance and penalties. the response also provides detailed feedback on the scope of existing reduced and zero rates and recommendations for improvements, particularly in relation to scope of the RCP definition and other charity specific reliefs.
Professional negligence and failed tax avoidance schemes
The High Court of Justice (in the case of Halsall and others v. Champion Consulting Ltd and others [2017] ) has handed down judgment in a professional negligence claim arising out of failed tax avoidance schemes (one of which was a “charity shell” scheme). HHJ Moulder found the tax adviser defendants to be negligent, but nevertheless ruled that, on the facts of the case, the claims were time barred. This new commentary by Sonia Ferreira, Associate at the law firm Dentons, summarises the professional negligence findings and concentrates on the limitation arguments.
State Aid case
In Congregación de Escuelas Pías Provincia Betania [2017] the CJEU has ruled on whether a tax exemption for the Roman Catholic Church in Spain was permissible under EU State Aid rules. Further information on the case can be found here.
Gift Aid working group meeting
CTG’s Gift Aid working group will be meeting again in London next week (4 July 2017) to discuss topical practical issues facing charities. An HMRC representative will be at part of the meeting to discuss the proposed new Gift Aid confirmation statements for online fundraising. To attend (charities only) or find out more about the group, please contact info@charitytaxgroup.org.uk.
Other topical stories
The following items may also be of interest to CTG members (external links unless otherwise stated)
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
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.
CTG website
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