HMRC has substantially rewritten its (publicly available) internal guidance on how to decide whether a transaction is a grant or contract for VAT purposes. The new guidance provides much greater clarity on HMRC’s policy. The guidance contains useful lists of: “factors indicating the payment is a grant”; “factors indicating the payment is consideration for a supply”; and “factors that are neutral”.
The Museums and Galleries tax relief is a new relief available to organisations from 1 April 2017. Despite being a corporation tax relief, it can provide benefit to a charity, despite no tax being paid when they are undertaking new qualifying exhibitions.
Financial Reporting Standard 102 (FRS102) was updated in December 2017 to ensure that there is clarity and consistency in how gift aid payments by subsidiaries are reported. While the tax implications of this arrangement have not changed, there have been changes to the accounting standards which will affect the way this arrangement is presented in the statutory accounts.
From 6 April 2016 most unlisted UK companies (including charitable companies) are required to keep a register of persons with significant influence or control (‘PSCs’) over the company. If a company does not immediately know if it has any PSCs or who they are, it must take reasonable steps to find out. The PSC register must be kept up to date and sent to Companies House with the company’s annual confirmation statement (which replaces the annual return) from 30 June 2016 onwards.
At a workshop held at the Park Theatre in London in January 2016 a group of charitable London theatres and other arts organisations reached agreement with HMRC on guidelines for the design of Gift Aid compliant theatre patron/supporter schemes. The guidelines are non-binding on charities and HMRC and are subject to the outcome of the Gift Aid donor benefit consultation.
Keep it small and local. Individuals can now get tax breaks for investment in small social enterprises. Helen Elliott explains the idea behind social investment tax relief and how it works.
If you run shops and use the Retail Gift Aid Scheme (‘RGAS’) you need to take action over the substantial changes HMRC made to the guidance on 30 October 2015, such as mandatory training and internal checks. Full details of these changes can be found in this guidance.
In March 2015, the government announced changes to charity law that allow more charities to become audit exempt. The changes apply to financial years ending on or after 31 March 2015. If your charity has income between £500,000 and £1,000,000 and gross assets below £3,260,000 you may no longer require an audit.
The Chancellor announced the government’s budget on 18 March 2015. A summary of key changes affecting charities, social enterprise, individuals and business for download.
From 1 January 2015 changes were made to the VAT “place of supply of services” rules for digital services. These changes affect UK businesses that supply, in return for consideration electronic, telecommunication or broadcasting services (‘digital services’) to non-business customers (“B2C”) in other EU states.
Many arts charities operate patron schemes, where supporters are offered packages of benefits that are designed to comply with the Gift Aid rules. A new tax tribunal case, Serpentine Trust, has highlighted that such schemes, whilst they may work for Gift Aid, can be problematic for VAT.
This is a VAT measure introduced in 2012 which allows charities to share services without incurring additional VAT costs. To take advantage of the VAT relief, a group of charities need to set up a cost sharing group (“CSG”). The group can then undertake services and recharge the cost to its members exempt from VAT provided various conditions are met.