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Since the last edition of Charities newsletter, HMRC
has announced a change to the definition of 'charity' for
VAT purposes. From 1 April 2012, the definition for VAT purposes is
the same as the definition given for charities that claim gift
aid.
In order for a charity to obtain VAT relief on the purchase of
certain eligible goods and services, a charity will need to ensure
that it meets the new definition in order to provide the relevant
certification required by the supplier for zero-rating.
HMRC has published draft legislation relating to the
implementation of the costsharing VAT exemption. The legislation
will be enacted when the Finance Bill receives Royal Assent in the
summer.
Budget round-up
This year's Budget contained some VAT changes that will be
of interest to charities. The zero-rating of approved alterations
to certain listed charitable and residential buildings is to be
withdrawn from 1 October 2012. HMRC will, however, extend the grant
scheme currently offered by the department for culture, media and
sport to reimburse an amount equal to the VAT charged on alteration
works to listed places of worship.
The reduced VAT rate (currently 5%) for the installation of
energy saving materials in certain charitable buildings will also
be withdrawn, but not until 2013.
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On 18 April 2013 the UK government issued a legal challenge to the decision of the EU Council of 22 January 2013 which authorised a subset of the EU (not including the UK) to introduce a financial transaction tax.
A discussion on the changes brought by the Finance Bill in relation to the commitments to raise the Inheritance Tax and exempt limit on the value of transfers of assets to a non-UK domiciled spouse or civil partners.
In his March 2011 Budget statement the Chancellor of the Exchequer announced consultation on the introduction of a statutory definition of tax residence.
The European Court of Justice recently ruled that VAT on investment management fees paid by the trustees of a UK defined benefit pension scheme is irrecoverable under a VAT exemption for special investment contained in two EU Directives.
In the latest budget, Chancellor George Osborne announced that the corporation tax rate in Britain will be cut by an additional one per cent to 20 per cent by April 2015.
A summary of the main Budget items affecting farmers and landowners.
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