CTG Newsletter – 6 November 2017

Corporate Criminal Offence – implications for charities

Charities should be aware of new corporate governance requirement, to manage the risk of facilitating tax evasion, following the introduction of the Corporate Criminal Offences from 30 September 2017.

Tania Dimitrovich-Archer, Senior Tax Manager at KPMG, has prepared a new commentary assessing the implications for charities.

OTS review of VAT

The Office of Tax Simplification (OTS) has announced that it will shortly publish a report setting out a range of proposals for simplifying VAT. The OTS’s core recommendations will include:

• that the government should examine the current approach to the level and design of the VAT registration threshold, with a view to setting out a future direction of travel for the threshold, including consideration of the potential benefits of a smoothing mechanism
• that HMRC should maintain a programme for further improving the clarity of its guidance and its responsiveness to requests for rulings in areas of uncertainty
• that HM Treasury and HMRC should undertake a comprehensive review of the reduced rate, zero-rate and exemption schedules, working with the support of the OTS

The report also

• makes recommendations for improving the day to day administration of the tax, including better and more accessible guidance and a less uncertain penalty system. This would particularly benefit small businesses
• considers specific areas of technical difficulty, including the partial exemption regime, the capital goods scheme, the option to tax and other special schemes

CTG’s response to the OTS’s call for evidence can be found here.

Charity Tax Commission

NCVO has launched a commission on charity taxation, which will be chaired by Sir Nicholas Montagu and will develop recommendations to Government. Full details can be found here.

Responding to the launch of the Commission, Charity Tax Group (CTG) Chairman, John Hemming, commented:

“CTG welcomes this review of the tax status of charities, which offers a further opportunity to challenge the anomalous tax position charities often find themselves in, particularly in respect of VAT. It is essential that charity tax reliefs keep up with societal and technological developments, or they may become obsolete. We look forward to working with the Commission and recommend that future-proofing tax reliefs for charities be one of its major areas of focus.”

Tax Updates in Cardiff and Manchester

CTG has organised tax update meetings for charities and advisers this November, in Cardiff and Manchester. Both sessions will review recent policy developments and providing practical tax updates and will include a presentation on recent Gift Aid developments, by Steve Carroll, from HMRC’s Charities Outreach team.

Other topics to be covered will include: Implications of Brexit for the sector, review of recent VAT case law, Making Tax Digital, Business rates developments and Autumn Budget 2017.

Both seminars will take place from 14:00 to 16:00, with a sandwich lunch available from 13:00. You can register for each event by following the link below:

• 16 November 2017, in Cardiff, in association with Deloitte
• 27 November 2017, in Manchester, in association with EY

Round-up of topical developments

• GDPR: The Information Commissioner’s Office (ICO) has launched a dedicated advice line, aimed at those running small businesses or charities, to assist them with the particular problems they face getting ready for the General Data Protection Regulation (GDPR).
• Reform of Corporation Tax loss relief: HMRC is seeking comments on draft guidance covering the reform of Corporation Tax loss relief. This is a second tranche of guidance, focusing on group relief for carried forward losses and the relaxation of carried-forward non-trade losses. Amended and further draft guidance will be issued in due course. Comments about this draft guidance should be emailed to ct.lossreform@hmrc.gsi.gov.uk by 5 January 2018.
• Interest rates: HMRC interest rates for late payments will be revised following the Bank of England interest rate rise. HMRC interest rates are linked to the Bank of England base rate, which is now 0.5%.
• Living wage: The Living Wage Foundation has announced a new UK Living Wage of £8.75 per hour, an increase of 30p per hour. The Mayor of London has also announced a new London Living Wage of £10.20 per hour, an increase of 45p per hour.
• Charity Commission funding: The CEO of the Charity Commission Helen Stephenson has published a blog post in which she has set out the Commission’s case to Government for increased funding to help it deal with the significant increase in demand for its services.
• NICs Bill: Exchequer Secretary to the Treasury Andrew Jones has published a written ministerial statement giving an update on the National Insurance Contributions Bill, which will now be introduced in 2018.
• Scottish Income Tax: The Scottish Government has published a discussion paper to initiate debate about income tax policy ahead of the draft budget in December, with suggestions that it may be planning to make use of devolved powers to raise rates or change thresholds.

CTG Newsletter Archive

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

• CTG Newsletter – 2 November 2017
• CTG Newsletter – 1 November 2017
• CTG Newsletter – 26 October 2017
• CTG Newsletter – 25 October 2017
• CTG Newsletter – 17 October 2017
• CTG Newsletter – 10 October 2017

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

• Corporate Criminal Offence – implications for charities (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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