CTG Newsletter – 9 September 2019

Charity Tax Group updates

Support the Charity Tax Group

CTG does not have a formal membership subscription, or strict restrictions on who can access its outputs, because it was set up to represent the interests of all charities, with a primary function of lobbying Government for an improved tax system for charities.

Instead we ask charities to make a donation each year, if they are able to do so. All subscribers to the newsletter were recently sent an e-mail asking them to consider making a donation towards CTG’s work and we are very grateful to those charities that have responded positively.

However, at present, only 30% of the charities receiving the CTG newsletter have donated in 2019, which means we continue to operate within a very limited budget. It also means that our work, undertaken on behalf of the whole sector, is being subsidised by a core group of charities.

If your charity has found CTG newsletters and events useful and want to demonstrate your support our lobbying work on behalf of the sector, please consider a donation for 2019 (and a donation form can be found here), or provision for a contribution in your budget for 2020. On average, smaller charities donate £200-£400, medium size charities donate £400-£800 and larger charities donate over £800 a year. Any contribution, however large or small, makes a big difference towards our work. We appreciate that it is not always possible for charities to make a contribution, and if that is the case, this is useful to know so we do not contact you unnecessarily.

Financial support is of course very helpful, but we also rely on members for feedback to consultation and to help shape our policy work and representations to Government. If you have any questions about CTG’s work or would like to get more involved, please do not hesitate to contact us at info@charitytaxgroup.org.uk.. If any of your colleagues would like to receive our newsletter, please encourage them to register here.

Influencing charity taxation

The Prime Minister will formally suspend Parliament for five weeks from Monday night, after the bill forcing him to ask for a three-month extension to Brexit if the UK is heading for no deal becomes law. The Government will move a prorogation motion at the close of parliamentary business on Monday, meaning MPs will not return to the House of Commons until 14 October.

Meanwhile, a round-up of parliamentary questions in summer/autumn 2019 on issues likely to be of interest to CTG members can be read here. This includes a full list of answers (updated today) to questions relating to Gift Aid, VAT and wills, Apprenticeship Levy and a review of charity taxation and reliefs.

CTG has recently published an update on its recent policy work, as well as a review of key charity tax developments since the start of 2019.

Help inform CTG’s consultation responses

HMRC’s consultation on the Simplification of VAT Partial Exemption and the Capital Goods Scheme closes 26 September 2019. CTG is in the process of preparing a draft submission in advance of a meeting with HMRC next week to discuss the consultation. If you have any comments on this consultations please send them to info@charitytaxgroup.org.uk.

Events

• Business rates seminar: CTG members have been invited to attend a free seminar on business rates (and how to avoid pitfalls) run by Crowe UK, with speakers including Colin Hunter (Lambert Smith Hampton) who addressed this year’s Tax Conference and Jenny Wigley a barrister at Landmark Chambers. The seminar will take place on 17 October 2019 and spaces are limited – register here.
• Charity updates: Price Bailey are running a series of free seminars for charities in London and the East of England in September, which will include a round-up on the latest in accounting, tax and relevant VAT cases. More details can be found here.
• No-deal Brexit: NCVO hosting a free webinar with DCMS on 11 September 2019 that will explore areas where charities may be affected if the UK leaves the EU without a deal, suggesting practical steps that organisation may wish to take. More details can be found here.
• Making Tax Digital webinars: HMRC is running a series of webinars on the rationale and requirements of Making Tax Digital for VAT. Register here.
  • 13 September: 10.00-11.00
  • 26 September 12.00-13.00
  • 27 September: 10.00-11.00

If your organisation is offering free events that may be of interest to CTG members, please let us know at info@charitytaxgroup.org.uk and we may be able to share details in future newsletters.

Forthcoming VAT questionnaire

CTG is undertaking a research project to scope and quantify the value of VAT reliefs available to charities, as well as to understand the impact of irrecoverable VAT. This will be important in informing our representations to Government regardless of the outcome of the Brexit negotiations. Details about the project can be found here and also in this presentation to universities earlier this summer. We are working with experts at London Economics on a  detailed VAT survey for charities and we are now in the final stages of developing the questionnaire. A representative sample of approximately 200 charities will be asked to complete the survey and we will be contacting chosen organisations in September. It always helps if we have volunteers, so if your charity would definitely be happy to be involved please contact info@charitytaxgroup.org.uk.

Tax developments and news

Gift Aid Awareness Day – 3 October 2019

Gift Aid Awareness Day will be returning this year on Thursday 3 October 2019. The Charity Finance Group (CFG) is co-ordinating this campaign and further information can be found here (with more information on the campaign toolkit to be published as it becomes available). For readers on Twitter, follow #tickthebox for updates.

HMRC updates guidance on the VAT Tour Operators Margin Scheme (TOMS)

HMRC has updated guidance on the VAT Tour Operators Margin Scheme (TOMS) to clarify the correct treatment of retained payments and deposits. When HMRC’s guidance was updated in March 2019, there was an error which may have led to organisation’s paying too much VAT. Read more here.

Introduction of the VAT domestic reverse charge for building and construction services delayed

HMRC has confirmed that the implementation of the domestic reverse charge VAT for construction services has been delayed for a period of 12 months until 1 October 2020 to give users more time to prepare. A commentary by experts at Mazars on the steps that affected charities should take to prepare has been updated to reflect this delay.

Round-up of other developments

• Economic Operator Registration and Identification number (EORI): HMRC has published an EORI mythbuster which dispels common misconceptions about EORI numbers.
• Brexit Statutory Instruments: Statutory Instruments for The Value Added Tax (Miscellaneous Amendments and Transitional Provisions) (EU Exit) Regulations 2019 have now been laid before Parliament and published on the Legislation website. The provisions are necessary to ensure the UK’s Customs, VAT and Excise regimes will function in the event of a no-deal Brexit. Read more here.
• Reforming the taxation of wealth: The Institute for Public Policy Research  has published a report on reforming the taxation of wealth and work. One proposal is that income from wealth should be taxed the same as income from work with capital gains tax and separate rates of tax for dividends to be abolished, and income from dividends and capital gains should be incorporated into the income tax schedule. It is argued that this reform would involve removing most exemptions, allowances, and reliefs that currently exist for both capital gains tax and dividend taxes. The report also proposes a formula-based system for income tax, with a single, gradually-rising tax schedule which is applied to all sources of income regardless of origin.
• Making Tax Digital YouTube videos: HMRC has published YouTube videos on ‘what is compatible software’ and ‘how to sign up to making tax digital for VAT’ have been updated. You can view the videos here.

ICMYI: Highlights from Summer 2019

• Governmment reshuffle – new Charity Tax Minister and Minister for Civil Society
• Gift Aid donor benefits guidance updated
• Creative industries tax reliefs 2018-19 published
• Review of charity tax developments so far in 2019
• CTG responds to consultation on restricting the Employment Allowance
• Update on Gift Aid on donations received via Facebook
• HMRC guidance on off-payroll working published
• VAT on lost space of bathroom and washroom conversions for disabled people
• Review of the VAT exemption for cost sharing groups in the social housing sector

Resources

A full archive of CTG commentaries can be found here. If you would like to write a commentary for CTG, please get in touch. Recent newsletters can be accessed here and the updated VAT case law tracker can be read here.

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