Experts criticise HMRC proposals for reforming substantial donor law

Their initial reaction is that draft revisions are opaque and complicated

HMRC HQ
HMRC HQ

A draft reform of substantial donor legislation has been described as opaque and difficult to analyse by some voluntary sector experts.

The draft, written by HM Revenue & Customs, follows a long campaign for reform and has been circulated to a number of legal and financial experts for feedback.

One recipient, who did not wish to be named, said the draft was so opaque that more information was needed to analyse it properly.

Another said: "It will need careful analysis to ensure it deals with existing problems and doesn't create new ones. We've been asked to respond by 8 November, which will be difficult."

Substantial donor legislation was introduced to ensure charity tax breaks are not used for tax avoidance. It scrutinises any payment by a charity to someone who has given - or is connected to someone who has given - more than £25,000 in a single year to that charity.

Sector experts say it penalises legitimate transactions and have asked for a "purpose test" to ensure this doesn't happen. They have also called for the legislation to penalise donors, rather than charities.

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