CTG Newsletter – 4 October 2017

European Commission VAT proposals

The European Commission has published a series of proposals on reforming the EU VAT system. This includes setting out a series of fundamental principles to create a simplified, definitive Single EU VAT area, as well as aiming to combat VAT fraud. Full details are available here.

A separate proposal for a modernised system of setting VAT rates (including the e-publications) will follow in November 2017 and will aim to give greater flexibility to Member States. The European Commission’s intent is to ‘modernise the rules by removing outdated legal restrictions for Member States, while preventing the erosion of VAT revenues and a shrinking of the tax base’.

Although Brexit may yet mean that changes to VAT rules at a European level are no longer of direct relevance to the UK, the direction of travel remains important given the status of potential transition periods and future trading/customs/VAT relationships are still unclear. CTG’s response to the original consultation on VAT rates can be read here.

Benefits of joining the Gift Aid practical issues working group

Members of CTG’s Gift Aid practical issues working group have shared their experiences of involvement in this working group and the practical benefits for their charity.

Keren Caird, Retail Business Development Gift Aid Manager, Sue Ryder

“I have been a member of this working group since its formation. Since that time membership has grown considerably with representatives from large and small charities joining.  The group meets every three months, to discuss everything Gift Aid and share examples of best practice.

“The group has a close working relationship with HMRC officials, and they regularly attend the meetings.  As a result of this relationship, members of the group have been invited to join two HMRC working groups on the future of Gift Aid and Gift Aid donor benefits. This gives the group a unique opportunity to influence future guidance and policies, with the overall goal of ‘future proofing’ Gift Aid as technological systems develop.

“I always feel motivated and well informed at the end of each meeting and really enjoy the opportunity to spend time with colleagues across the charity sector. I recommend that all charities operating Gift Aid get involved in this group.”

Donna Perry, Gift Aid Compliance Manager, Unicef

“Being a member of this group gives you the opportunity to network with other charities and colleagues across this sector who are administering Gift Aid and looking to make the most of Gift Aid for their Charity.

“It gives you a perfect opportunity to raise issues, concerns, share best working practices and helps resolve any Gift Aid queries you may have. The group works using Chatham House Rules, so confidentiality is a certainty which gives more confidence in raising any issues.

“The group gives you the perfect opportunity to work with people who are happy to lobby HMRC with any Gift Aid concerns and even new ideas. The group has access to HMRC contacts and are happy for them to meet with the group, present and share updates and idea.

“Being a member of this group has been a huge benefit in helping me make the most of Gift Aid for my charity.”

There are now almost 50 charities on the working group’s mailing list, with 25+ organisations regularly attending the quarterly meetings. Between meetings the working group offers charities the opportunity to request feedback from their peers on Gift Aid related issues they encounter day-to-day.

To join the Working Group or submit a practical Gift Aid question please contact us at info@charitytaxgroup.org.uk

Round-up of topical developments

• Office of Tax Simplification (OTS) updates:
  • The OTS has published a paper calling for evidence as part of its review of capital allowances and depreciation. The deadline for comments is 30 November 2017. Full details here.
  • The OTS has also published an outline of its future work programme, which includes an update on the VAT review: “We will continue to progress the report on VAT with the aim of publishing it in October or November. Work has also commenced on a high-level paper on the business lifecycle which looks at key events and the various taxes which apply at these points”.
• Welsh tax bands:
  • Welsh Finance Secretary, Mark Drakeford, has published the new rates and bands for Wales’ first taxes in almost 800 years. Land Transaction Tax (LTT) and Landfill Disposals Tax (LDT) will be introduced on 1 April 2018, replacing Stamp Duty Land Tax and Landfill Tax, respectively.
  • The Finance Secretary also announced a shortlist of 4 new tax ideas – based on feedback from the public – which will be developed further this autumn. One proposal will be put to the UK government in 2018 to test the Wales Act powers. The 4 new ideas which will be explored further are:
    • vacant land tax
    • disposable plastic tax
    • tourism tax
    • levy to support social care.
• Regulators discuss online charitable giving: The Charity Commission and the Fundraising Regulator recently convened a meeting with senior representatives from fourteen of the major giving platforms in the UK, to discuss issues around online giving, including possible fraudulent activity, oversight over the end-use of funds, and transparency about fees charged by sites. The aim was to collectively agree principles to increase public understanding and transparency about the different forms of donating on online platforms, in order to secure public trust and confidence. An area for further discussion included further collaborative work to be done to ensure clear and consistent advice is given across different platforms, in particular on issues such as the role Charity Commission, eligibility of donations for Gift Aid and what happens in the event of a failed appeal.
• Apprenticeships update: The Education and Skills Funding Agency has published its October 2017 newsletter including topical updates relevant to organisations affected by the Apprenticeship Levy.

CTG Newsletter Archive

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

• CTG Newsletter – 27 September 2017
• CTG Newsletter – 22 September 2017
• CTG Newsletter – 15 September 2017
• CTG Newsletter – 12 September 2017
• CTG Newsletter – 6 September 2017

CTG Commentaries

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

• 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)
• 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)
• 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.

Website, newsletters and supporting CTG

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