Finance: Revenue & Customs opens 'discussion forum' on tax system

HM Revenue & Customs (HMRC) has set up a Charities Advisory Group to liaise with the sector over the administration of the taxation system.

The body, which will cover issues such as VAT, charities' PAYE and Gift Aid reclaims and audits, met for the first time last Friday.

Officials from HMRC were joined by representatives from sector bodies including the Charities' Tax Reform Group (CTRG), the NCVO, Charities Aid Foundation, the Charity Finance Directors' Group, Acevo and the Institute of Fundraising.

Charities will be able to raise any issue concerning the operation of the tax system, such as guidance or how schemes such as Gift Aid are administered.

But the question of reform of controversial issues such as VAT is not on the agenda, because that is the responsibility of the Treasury.

The move was welcomed by the CTRG. Its director, Helen Donoghue, said: "We think this is a very positive step and should be encouraged.

"We are keen to ensure the tax regime for charities is as clear as possible to avoid expensive and time-consuming errors.

"The more the systems can be streamlined, the easier it will be for everyone."

The group was set up to implement a recommendation in this year's Budget.

It follows the creation of HMRC Charities, a single unit to cover charity tax and donations under director Mark Nellthorp.

A spokeswoman for HMRC said the group "will act as a discussion forum to guide the development of the charities team. Its key focus will be organisational issues and how HMRC interacts with the sector." The group has been set up as an "immediate sounding board" and can raise issues as a group or by means of individuals.

HMRC Charities is also charged with giving policy advice to ministers.

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