HM Treasury 8 - 9 November 1999

GETTING BRITAIN GIVING IN THE 21ST CENTURY

Modernising and simplifying the tax system to boost charity giving in Britain are at the heart of a major new package of tax incentives announced today by the Chancellor, Gordon Brown.

Announcing the package of measures entitled Getting Britain Giving in the 21st Century, the Economic Secretary, Melanie Johnson said:

"The package of measures announced by the Chancellor today is the result of the Government's extensive consultation on its review of charity taxation.

"We have listened to what charities and others have told us, and the measures we are introducing go well beyond the proposals set out in the consultation document.

"Getting Britain Giving delivers a modernised charity tax system that will make tax breaks more extensive, easier to understand and therefore more attractive to more people.

"We are helping charities to help themselves. The extension of the Gift Aid scheme is a major incentive to help boost giving in Britain. It will help charities to make much more out of their donations."

The abolition of the £250 minimum limit for donations in the new Gift Aid scheme means that, in future, tax relief will apply to any donation whether large or small, regular or one-off.

Donors will also be able to join the scheme by phone or Internet, removing the need for them to sign a form.

Other new measures to help boost individual and business giving include:

abolishing the £1200 maximum limit for Payroll Giving. In future employees will be able to give as much as they like through their pay packet;
boosting the take-up of Payroll Giving with a promotional campaign. The campaign, to be launched next year, will be backed by a 10 per cent supplement on donations paid to charities for three years. Both the campaign and the time-limited supplement will be funded by the Government;
encouraging gifts of quoted shares and securities to charity by introducing a new income tax relief. The tax relief will be given for the full market value of the gift, in addition to any existing capital gains tax relief; and
removing existing barriers facing those who wish to settle assets to charities through trusts.

More measures to simplify and modernise the tax system for charities include:

removing the need for small charities to go to the expense and trouble of setting up a subsidiary company to run their fund-raising trades by introducing a new exemption from tax for the profits of small fund-raising trades run by charities;
extending and aligning the income tax and VAT exemptions for charity fund-raising events. In future these exemptions will apply to a wider range of events. Also charities will no longer have to operate two sets of rules and deal with two Government Departments;
a significant extension to the VAT zero rating of advertisements bought by charities;
raising from £250 to £1,000 the de minimis limit below which charities and other businesses do not have to account for VAT when they de-register; and

other VAT changes which will make life easier for charities, such as VAT relief for bathrooms in day centres, and relief for donated goods sold to disabled people and those on low incomes.

Work continues on improving the service provided by Inland Revenue and HM Customs & Excise to charities. For example, developing a new telephone help-line, a directory for charities, new tax guidance and better use of the Internet.

All of the changes in Getting Britain Giving are due to start from April 2000.

NOTES TO EDITORS

1. The review of charity taxation was launched in July 1997. During the first phase of the open consultation, over 3,000 charities and other interested parties sent in their views on a wide range of subjects. A consultation document was published on Budget Day this year containing the Government's options for further consultation. Some 500 responses were received before the consultation closed on 31 August. A summary of the consultation responses was published on 28 October (see Press Notice 174/99).

2. Information sheets containing details of all the measures announced today are being sent to those organisations that responded to the consultation document. Copies of

the information sheets;
summaries of the responses to the consultation document;
the findings of research carried out by Inland Revenue as part of the review; and
the amended Draft Regulatory Impact Assessment
are available on the HM Treasury and Inland Revenue websites:

http://www.hm-treasury.gov.uk

http://www.inlandrevenue.gov.uk

HM TREASURY PRESS OFFICE