CTG Newsletter – 6 April 2017
CTG responds to tax changes from 6 April 2017
The start of the new tax year sees a number of new tax rules implemented. Significant changes have been made to the Gift Aid Small Donations Scheme (GASDS) following a year-long consultation process while new rules relating to Gift Aid and intermediaries and off payroll working are now in force and the Apprenticeship Levy begins this month.
CTG Chairman, John Hemming, said:
“In respect of the Gift Aid Small Donations Scheme (GASDS) the relaxation of the eligibility requirements, clarification of the community buildings rules and extension to contactless payments are all welcome and we hope that these changes will help to widen accessibility to the Scheme, particularly among smaller charities. However, we encourage the Government to continue to review the effectiveness of these changes, and consider further reforms, if there is no significant additional take-up. The charity sector will work hard to ensure that it maximises the value of this important relief and CTG will work with others in the sector and Government to promote the Scheme as much as possible.
“The other tax changes introduced today do little to address concerns about the overall complexity of the tax system for charities and there is a real risk that new burdens such as the Apprenticeship Levy, alongside the forthcoming increase in IPT and continued irrecoverable VAT costs, will begin to undermine the charities’ operational effectiveness. We therefore welcome the commitment by the Financial Secretary to the Treasury at the recent CTG Tax Conference that the Government would be forming a working group to assess the cumulative impact of taxation on charities and the requirements for further reform and simplification. To echo the Minister’s words, ‘charities must be at the top table on tax issues’ if we are to ensure a fair and proportionate system is in place.”
Changes to the Gift Aid Small Donations Scheme
Provisions in the Small Charitable Donations Act 2017 are effective from 6 April 2017 (affecting donations received from this point onwards – those collected before this date will be subject to the old rules). The Act changes the Gift Aid Small Donations Scheme by:
- completely removing the two-year eligibility rule and the Gift Aid history requirement (two-in-four rule)
- ensuring the scheme continues to reflect the realities of modern fundraising by allowing contactless donations to be eligible
- providing that charities – or a group of charities – may claim under the main allowance or under the community buildings allowance, but not both
- reforming the community buildings rules to allow donations received outside of the community building but within the same local authority area to qualify
HMRC’s entry level guidance note and detailed guidance note, as well as specific guidance on claiming a top-up payment on small charitable donations have also been updated, following consultation with CTG and other sector bodies. Further information is available here.
Churches may also find it useful to refer to this helpful guidance note by the Church of England.
Probate fees dispute update
The Joint Committee on Statutory Instruments by introducing new increased probate fee charges, The rises have the “hallmarks of taxes rather than fees”, the Committee said, given that payments would increase from £155 to £20,000 for larger estates. The report said that the changes could breach the constitutional principle that there should be no taxation without the consent of parliament. It called for the proposals to “have the attention” of both houses.
The proposed fees were strongly opposed by almost all who responded to the consultation, and an online petition “To reconsider the proposed significant and unreasonable increase in probate fees” has gathered almost 34,000 signatures. The Government recently responded to the petition confirming it intends to proceed as planned. Further information is available here.
HMRC Helpbook 480: Expenses and benefits for 2017
The helpbook published by HMRC explains the tax law relating to expenses payments and benefits received by directors and employees for current and previous tax years. This includes details of the exemption for employer provided living accommodation, to which charities are eligible.
30 year anniversary of payroll giving
DCMS has published a news story celebrating the 30 year anniversary of payroll giving.
CGT relief for gifts to charity – 2017 helpsheet published
HMRC has updated the helpsheet that explains how gifts are dealt with for Capital Gains Tax purposes, and is mainly concerned with Hold-over Relief, which in effect allows liability to be deferred and passed to the person to whom the gift is made. It also covers gifts to charities, but it’s only an introduction. Further information is available here.
Legal tender – £1 coin and £5 note
The bank of England has confirmed that paper £5 notes are to be withdrawn from circulation on 5 May 2017. This means that the only £5 note that will be legal tender after this date will be the polymer £5 note featuring Sir Winston Churchill, which was introduced in September 2016. Paper £5 notes, which features a portrait of Elizabeth Fry, will continue to be able to be spent until 5 May, after which they will have to be exchanged at the Bank of England, in person or by post.
Members are reminded that the new twelve-sided £1 coin came into circulation on 28 March 2017. Old coins will remain legal tender until 15 October 2017, after which time they will no longer be accepted by businesses but can be exchanged at the bank.
Cost-sharing VAT exemption case
In his Opinion on the Commission v Germany (C‑616/15) case AG Wathelet concluded that Germany had implemented the cost-sharing VAT exemption too widely. Further information on this and other recent cost-sharing cases can be found here.
Commons’ Business Rates inquiry
The House of Commons’ Public Accounts Committee (PAC) has announced an inquiry into Business Rates in the UK. This inquiry is taking place alongside the Department for Communities and Local Government’s ‘fair funding review’ of the funding needs of local authorities, which will set the funding baselines for the start of 100% business rates retention. The deadline for giving written submissions is Tuesday 18 April 2017; the Committee will consider the issue in a session on 24 April.
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
Do you have colleagues/friends in other charities that would benefit from receiving CTG’s newsletters? If so, please share this link to a page with full details about membership. Thank you again for supporting CTG in 2017.
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.
CTG Conference and Annual Review
Members are reminded that all of the presentation slides from the recent CTG Tax Conference 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.
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