06 December 2013

Autumn Statement

The Chancellor said yesterday in presenting his Autumn Statement that he wished to put beyond doubt that entities established for the purposes of tax avoidance would not have any entitlement to charitable tax reliefs and that the measure would be introduced in the Finance Bill 2014.

Whether the Chancellor intends to create a new definition of a charity, or simply explicitly reinforce existing legislation remains to be seen but until the draft bill is produced charities will have very little visibility of how the changes may affect them. We will maintain a watching brief as the legislation develops.

A number of other announcements were made by the Chancellor which will affect charities. These include:

  • Social investment tax relief: it was confirmed that the proposed social investment tax relief will be available from April 2014 for qualifying investments into charities, community interest companies or community benefit societies. The relief will also be available on investments in social impact bonds issues by companies limited by shares. Further details of the relief will be published in January 2014. Withers’ responded to the government consultation on the relief which was covered in a previous e-alert a copy of our response is available by email from wendy.regan@withersworldwide.com
  • Gift Aid: The government is committed to making it easier for charities to claim Gift Aid on charitable donations, including revising the Gift Aid form. The government will allow intermediaries to take a role in operating Gift Aid but will consult further before any new legislation is introduced.
  • Single portal for charity registration: In a welcome move, HMRC is to develop an online portal which will allow charities to apply to the Charity Commission for registration as a charity and HMRC for registration as a charity for tax purposes through a single gateway.
  • Community Amateur Sports Clubs: From April 2014 donations by companies to Community Amateur Sports Clubs will be eligible for Gift Aid.
  • Stamp Duty Land Tax relief: The government will legislate in the Finance Bill 2014 to make it clear that where a charity purchases property jointly with a non-charitable entity, the charity will be able to claim relief from SDLT on its proportion of the purchase. 
  • Mr Osborne also announced that £100m of the money raised in fines levied on UK banks for their part in the Libor scandal would be donated to armed forces charities. A number of banks including Barclays and Royal Bank of Scotland were fined for their role in attempting to fix the inter-bank interest rate. The money will be distributed to charities such as Withers’ charity client SSAFA, the RAF Association and charities which support police and ambulance personnel.

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