CTG Newsletter – 30 November 2017

Review of the Gift Aid donor benefits guidance – feedback requested

The Charity Tax Forum has convened a working group to review the current HMRC guidance on the Gift Aid donor benefit rules.

Since the first working group meeting there was an announcement in Budget 2017 that the Government will be reforming the Relevant Value Test (chapter 3.21 below) from Spring 2019, to introduce a new two threshold system – further details here. These changes will also, in due course, need to be reflected in updated guidance.

At the working group meeting the Charity Tax Group (CTG) was tasked with co-ordinating feedback from the sector in respect of suggested changes to the guidance. We would therefore welcome comments from members on which sections of the guidance could be improved or clarified and situations in which additional guidance or examples would be useful. Ideally comments should be submitted by 5 January 2018 and preferably earlier.

Full details on how to submit feedback as well as the minutes of the first working group meeting and the Terms of Reference can be found here. We would also welcome volunteers to join a dedicated working group to review the guidance.

Barclay Review of Non-Domestic Rates in Scotland – charity relief for ALEOs protected

Following consultation with stakeholders, Finance Secretary Derek Mackay MSP today confirmed that the Scottish Government will not be accepting the recommendation of the Barclay Review to end rates relief for Arm’s Length External Organisations (ALEOs). The Scottish Government also announced that it will take steps to offset the charity relief benefit to councils from any new ALEO expansion in future. No further comment has been made by the Scottish Government on the treatment of private schools or university buildings let out for commercial use outside term-time, with the Barclay Review having recommended that both lose charitable rates relief.

Charity Tax Update in Manchester – Presentation Slides

CTG, in partnership with EY, ran a session for both charities and their advisers on 27 November 2017, exploring recent policy developments and providing practical tax updates.

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 by speakers from CTG and EY included VAT reform and Brexit, a review of recent VAT case law, implications of the Making Tax Digital agenda, business rates and relevant announcements in Budget 2017.

Round-up of other topical developments

• European Commission response to consultation on VAT rates: The European Commission has told CTG that it has delayed plans to publish its proposal for a modernised system of setting VAT rates, until early 2018 due to time pressures. CTG’s response to the European Commission consultation on VAT rate reform can be read here.
• Charity Commission effectiveness: The Charity Commission has welcomed a report from the National Audit Office (NAO) that recognises the progress it has made in becoming a more effective regulator, including in its digital transformation. The report follows the NAO’s previous reports into the effectiveness of the Commission in 2013 and 2015.  The report also makes a number of recommendations as to how the regulator can continue to make improvements and regulate more effectively. It stresses that a sustainable funding model will be crucial to the Commission’s continuing transformation and suggests a public consultation may be required to agree a shared position between government, the regulator and the sector as to the level and source of longer term funding. As part of this process the Commission is updating its risk framework to include tax avoidance.
• CIOs: The Charity Commission has published guidance about a phased timetable allowing charitable companies to convert to charitable incorporated organisations (CIOs). Chapter 5 of this document by Deloitte provides some useful advice on the taxation of CIOs.
• Reporting matters of interest: The Charity Commission has published information for auditors and independent examiners about reporting relevant matters of interest to UK charity regulators.
• Office for Civil Society: The Office for Civil Society has appointed David Knott as its next director.  Knott was promoted from being deputy director of the OCS and has previously worked in Prime Minister’s Strategy Unit, the Cabinet Office, Department for International Development, and as an adviser on public administration reform.
• CCNI: The Charity Commission in Northern Ireland (CCNI) has been told that hundreds of its adjudications could be invalid following a court order. A legal challenge to two of the CCNI’s recent decisions has now raised serious doubts on the validity of some previous rulings.
• Charity Commission charging: Appearing in front of MPs on the Digital, Culture, Media and Sport Select Committee, William Shawcross, the outgoing chair of the Charity Commission, has said he hopes that a consultation on charging charities to fund the regulator will be published before Christmas. Infrastructure groups including Navca have labelled any new charge as a “charity tax”

CTG Newsletter Archive

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

• CTG Budget Update – 24 November 2017
• CTG Budget Update – 22 November 2017
• CTG Newsletter – 21 November 2017
• CTG Newsletter – 17 November 2017
• CTG Newsletter – 14 November 2017
• CTG Newsletter – 8 November 2017
• CTG Newsletter – 6 November 2017
• CTG Newsletter – 2 November 2017
• CTG Newsletter – 1 November 2017
• CTG Newsletter – 26 October 2017
• CTG Newsletter – 25 October 2017

CTG’s VAT case law tracker has also been recently updated.

Expert Commentaries

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

• VAT case relating to ‘single supply’ and zero rated printed material (Graham Elliott)
• Corporate Criminal Offence – implications for charities (Ian Short and Tania Dimitrovich-Archer)
• Definition of a ‘sport’ for VAT purposes – English Bridge Union case (Graham Elliott)
• Relevant Residential and Relevant Charitable buildings: Clawback provisions – Balhousie Holdings case (Graham Elliott)
• Proposed new penalties for participation in VAT fraud (Edd Thompson and Juliet Bailey)
• Summary of recent VAT cases on partial exemption, sports supplies & charitable annexes (Graham Elliott)
• Benefits of joining the CTG Gift Aid practical issues working group (Keren Caird and Donna Perry)
• Iberdrola VAT case – Implications for Sveda? (Dermot Rafferty)
• Is a CASC a Charity (for Tax Purposes)? (Graham Elliott)
• Charity VAT Recovery – The Road Not Taken (Graham Elliott)
• 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)
• 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.

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