The Financial Secretary to the Treasury, Jane Ellison MP, who has ministerial responsibility for charity taxation, gave the keynote speech at Tuesday’s CTG Tax Conference.
In summary, the Minister said that Government welcomed working with the charities lobby, including CTG, and regarded it as a constructive partnership. She said that charities should be at the top table when we think about tax policy. She recognised the need for a balanced and sensible tax regime for charities while recognising the budgetary limitations the Government is still working within.
The Conference also saw presentations on issues including VAT, Gift Aid, Making Tax Digital, Brexit, Apprenticeship Levy and business rates, with speakers from HMRC, HM Treasury, charities and professional advisers. All of the presentation slides can be downloaded here.
CTG has also published its Annual Review, which focuses on the work that the organisation has done to extend its reach in the last year, particularly through the launch of its new website.
At the Conference delegates were asked to provide feedback on a range of issues:
If they are interested in joining a forum for further discussion with HMRC and other charities about good fundraising materials and Gift Aid
If they are interested in joining Gift Aid practical issues working group
If they are interested in supporting a new CTG Business Rates network to share experiences with Local Councils re reliefs, appeals valuations etc
If they have any thoughts on possible VAT simplifications before CTG meets the Office for Tax Simplification (OTS) VAT review team in mid April
If they have any interest in working with HMRC on the Making Tax Digital pilot scheme (to help identify any complexities that will face charity trading subsidiaries under the new digital reporting requirements.
If they have any feedback on current HMRC assessments in respect of VAT and direct mail
If they have any suggestions for ways in which the HMRC Charities Outreach team can improve its engagement with smaller charities.
CTG would also welcome feedback from members on the Conference itself, including the timing, content, speakers, venue, refreshments and overall experience. This will help us to ensure that future meetings are as helpful to members as possible. Please give your thoughts or suggestions here or alternatively contact us via email at info@charitytaxgroup.org.uk or on 020 7222 1265
Brexit
Article 50 triggered
The Prime Minister has sent a letter to the President of the European Council triggering Article 50 of the Treaty on the European Union. The letter sets out the approach that the Government intends to take towards discussions and negotiations on the UK’s departure from the EU, which it believes are in the interests both of the UK and the rest of the EU.
Great Repeal Bill
The Department for Exiting the EU has published a White Paper setting out its intended approach for the publishing of the Great Repeal Bill at the beginning of the next Parliamentary session. The Great Repeal Bill will not aim to make major changes to policy or establish new legal frameworks in the UK beyond those which are necessary to ensure the law continues to function properly from day one.
The Bill will do three main things:
It will repeal the ECA and return power to UK institutions.
Subject to the detail of the proposals set out in this White Paper, the Bill will convert EU law as it stands at the moment of exit into UK law. This allows businesses to continue operating knowing the rules have not changed significantly overnight. It also ensures that it will be up to the UK Parliament (and, where appropriate, the devolved legislatures) to amend, repeal or improve any piece of EU law (once it has been brought into UK law) at the appropriate time once the UK has left the EU.
The Bill will create powers to make secondary legislation. This will enable corrections to be made to the laws that would otherwise no longer operate appropriately once the UK has left the EU, so that the legal system continues to function correctly.
The Bill will provide that any question as to the meaning of EU-derived law will be determined in the UK courts by reference to the CJEU’s case law as it exists on the day we leave the EU. For example, CJEU case law has over the past four decades clarified what is and is not subject to VAT and failing to follow that case law in our own legal system would create new uncertainties about the application of VAT. In this way, CJEU case law will be given the same binding, or precedent, status in our courts as decisions of our own Supreme Court. Where a conflict arises between EU-derived law and new primary legislation passed by Parliament after our exit from the EU, then newer legislation will take precedence over the EU-derived law we have preserved. In this way, the Great Repeal Bill will end the general supremacy of EU law. If, after exit, a conflict arises between two pre-exit laws, one of which is an EU-derived law and the other not, then the EU-derived law will continue to take precedence over the other pre-exit law. Further information on the Bill can be found here.
VAT Notice 1002: adapted motor vehicles for disabled people
As set out in the Finance Bill 2017, from 1 April 2017, the Government is implementing a number of changes relating to the VAT zero-rating for the purchase of adapted motor vehicles for eligible disabled users. Following this, HMRC has published VAT Notice 1002: adapted motor vehicles for disabled people and charities, which replaces VAT helpsheets VAT1615 and VAT1616. Further information on the scope of the changes can be found here.
Museums and Galleries VAT refund legislation
HMRC has published draft legislation for the Value Added Tax (Refund of Tax to Museums and Galleries) (Amendment) Order 2017, which is a statutory instrument adding another 30 museums and galleries that allow free public admission to the VAT refund scheme. Comments on the Order are due by 21 April 2017. Further information can be found here.
Education committee publishes Apprenticeship Levy report
The Sub-Committee on Education, Skills and the Economy, formed from the Education and Business Select Committees, has published a report on the Government’s apprenticeships policies. It suggests that the Government’s Apprenticeship Levy – to be introduced from next week – and the target of three million ‘apprenticeship starts’ by the end of the Parliament are blunt instruments that show a lack of focus.
OTS tax complexity papers updated
The Office of Tax Simplification (OTS) has published a focus paper on the issue of tax complexity, updating aspects of its previous work on the topic and aiming to draw attention to the work that it has been doing since it was established in 2010. It has also revisited its older papers, some of which have been updated. The paper summarises and reviews five topics that the OTS has previously explored: Length of legislation; Tax thresholds; Layered legislation; Definitions in tax legislation; How to avoid complexity in the tax system. Full details about the reports can be found here.
Later this month, CTG is meeting representatives of the OTS VAT review, to highlight simplifications to the VAT system that would help charities. Please send any thoughts to info@charitytaxgroup.org.uk.
New £1 coin introduced
The new £1 coin has now become legal tender and coins are being distributed across the country. Consumers and businesses are reminded that they should return their old one pound coins – either by spending them or returning them directly to a bank – by 15 October 2017, when they cease to be legal tender. The Institute of Fundraising is encouraging people to donate their old £1 coins with a view to raising up to £21m, while also promoting the value of the Gift Aid Small Donations Scheme. The new coin was also promoted by the Minister at the Tax Conference.
Devolution of certain tax powers to Welsh Assembly
Powers have been implemented that pave the way for the introduction of Welsh Rates of Income Tax, by removing the requirement for a referendum before this could happen. Longer term this could have possible implications for Gift Aid.
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.
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.
