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Claire Welling, Leeds Community Accountant at WYCAS, gives a topically themed review of the Charity Tax Group briefing, held in Leeds on 9 July 2014.
The Charity Tax Group represents charities' interests in tax matters and does vital work to simplify systems and reduce tax costs for charities.
The Yellow Jersey as the leader of the field is awarded to Gift Aid. If your charity is not claiming Gift Aid on donations, check if any are eligible. The claim process is now entirely online and 64,000 charities are registered to claim online. The briefing covered data issues, with claims that HMRC will only liaise with the authorised official and that the HMRC Charities Helpline (tel. 0300 1231073) is easiest to get through between 8am and 10am.
King of the Mountains
The polkadot King of the Mountains is awarded to the tax implications of winning a contract. It is often difficult to distinguish between a grant and a contract, but if judged to be a contract (and so business income) which exceeds the VAT threshold of £81,000 in a 12 month period, the recipient must register for VAT with HMRC. Then when you invoice for your VATable service, the first 20% must go to HMRC as VAT. A significant impact on the finances!
The Green Jersey for the leader in the points competition is Business Rates relief. More responsibility for administering business rates relief is passing to local government and they may take a harder line in judging whether the premises is used wholly or mostly for the delivery of charitable activities.
The White Jersey for the best young rider may be an emerging possibility of a national VAT refund scheme for charities. The EU has recently confirmed there is no EU legal obstacle to introducing this. The Charity Tax Group continue to ask the UK government to introduce this.
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