CTG Regional Meeting
Mills & Reeve, Cambridge
26 October 2016
The voice of charities on Tax
Charity Tax Group
 Established in 1982 to make representations to Government on
charity taxation
 Over 500 members of all sizes representing all types of charitable
activity
 Leading voice for the sector on this issue
 www.charitytaxgroup.org.uk
The voice of charities on Tax
Charity Tax issues
Graham Elliott – Tax Advisor
26 October 2016
The voice of charities on Tax
Implications of Brexit
 Position until we leave
 Likely outcomes that impact on charities
 Impact of Great Repeal Act
 Existing referrals to CJEU
 Future of Case Law
The voice of charities on Tax
Brexit as Opportunity
 Possible extension of existing charity reliefs (e.g. buildings, disabled,
marketing spend)
 Possible omnibus reduced rate for charity purchases
 Seeking broader charity de-regulation for direct tax in drive for
simplification
The voice of charities on Tax
Brexit Threats
 At-risk exemptions
 Harsher input tax environment (cost component?)
 Need for higher tax revenues may see abolition of higher rate gift aid
relief
 Possible reduction of general gift aid’s application to certain charities
that serve well off
The voice of charities on Tax
Longridge on the Thames
 ‘Yarburgh’ history
 ‘Fisher Tests’
 Finland CJEU decision
 Court of Appeal decision
 End of ‘Predominant Concern’
The voice of charities on Tax
Gemeente Borsele
 Possible basis for low value charges being non-business
 Mixed with element of means testing
 Only related to public bodies?
 How small do you have to be?
The voice of charities on Tax
Village Hall VAT relief
 Caithness Rugby Football Club
 New Deer Community Association
The voice of charities on Tax
VAT and Mailing Packs
 What has been the outcome in practical terms?
The voice of charities on Tax
Other VAT issues
 Update on agency staff
 Printed material provided to donors (FotE case)
 Latest changes to S33A
 Issues relating to Hospices
The voice of charities on Tax
Gift Aid Donor Benefits Consultation
 Benefit costs deduction model
 Split payment model
 Change to existing benefit limits (e.g. one or two thresholds)
 Extension of ‘disregards’, perhaps with a specific value such as £3
The voice of charities on Tax
Donor Benefits – What hasn’t been
addressed?
 Issue of ‘in consequence’ and its interpretation
 Split payments requirement for specific benefits to be offered
 The VAT piece
 Rational model of valuation
The voice of charities on Tax
Gift Aid Small Donations Scheme
 Small Donations Bill has made its way through the HoC
 Bill relaxes eligibility, gets rid of Gift Aid history requirements to
increase take-up
 Matching rule maintained
 Contactless donations to be included in scope
 Community buildings rules changed to include donations within a
Local Authority
The voice of charities on Tax
Gift Aid practical issues Working Group
 Meets quarterly under Chatham House rules
 Representatives responsible for Gift Aid in some 20 charities
 Open discussion on all Gift Aid-related issues
 Sharing of best practice
The voice of charities on Tax
Apprenticeship Levy
 Set to enter into force from April 2017, Levy charged at 0.5% of
paybill
 £15,000 annual allowance means paybills over £3m caught
 Connected charities able to allocate their allowance amongst them
before relevant tax year
 Levy payments enter a digital account, receive 10% Government topup, can be spent on training
 18 months to spend funds, after which they are re-allocated (though
still to be used on apprenticeships)
The voice of charities on Tax
Apprenticeship Levy – concerns
 Lack of time to prepare – CTG calling for delay
 Lack of structure to provide apprenticeships in charity sector – CTG
calling for inclusion of volunteer training/expenses
 Unspent funds to be re-allocated away from “charitable purpose” –
CTG calling for ability to direct funds towards specific alternative
charity
The voice of charities on Tax
Apprenticeship Levy – next steps
 Government clear that digital providers will be ready
 Further guidance expected before end of 2016
 CTG keen to continue receiving feedback on cost of Levy on
charities – if possible including clear figures
The voice of charities on Tax
Common Reporting Standard
 CRS now implemented into UK law – unlike FATCA, no blanket
charity exemption
 “Financial Institutions” will have reporting requirements
 Charity is an FI if managed by an FI, and having 50% of gross
income from investing or trading in financial assets
 First reporting deadline: April 2017 – reporting requirements begin
from April 2016
The voice of charities on Tax
Other issues
 Making Tax Digital agenda
 Gift Aid Intermediaries
 Business rates review – Scotland and NI
 Museum tax relief
The voice of charities on Tax