You cannot claim income tax relief for a gift to charity if you
get something in return - that is not a gift. However, there is
an exception for payments which only give the right of entry to
premises, where the preservation of those premises is the object
of the charity. This was intended to cover annual subscriptions
to such bodies as the National Trust, but has been exploited by
some other organisations to gain tax relief for "day membership"
(i.e. entry fees at the gate). The rules are to be tightened up
after consultation with charities.
Merger of Revenue and Customs
The Chancellor announced, as expected, that the two main revenue-raising
departments will be merged. Mr Brown hopes for a large amount of
saving in public spending from this and other reforms to the public
sector, but the effect on taxpayers will be hard to assess in advance.
Dealing with a single authority may be useful, but coping with a
department which is going through a reorganization may lead to delays
The Chancellor declared his determination to reduce the benefit
of major tax avoidance schemes, either currently in existence or
in the future. There were measures to close specific loopholes on
VAT on buildings,financial products and finance leasing, and new
law and accountancy firms who market avoidance schemes to
register such schemes with the Revenue;
traders with over £10m of turnover to make certain declarations
to Customs about the use of VAT-avoidance schemes which will
be on a published register.
Simplified tax return
The Revenue carried out "pilot tests" of a shorter, simplified
tax return last year, and they will extend it this year before rolling
it out nationally in 2005. The shorter return will only be available
to people with relatively simple tax affairs, and these will be
selected from what was on the tax return last year. If you are not
selected, you cannot apply to be part of the pilot!