VENABLES AND KESSLER ON THE TAXATION OF CHARITIES, BY JAMES KESSLER QC, Fifth Edition (London, Key Haven, 2005) 518 pages. £125.00.

IT seems a shockingly long time ago that this reviewer was privileged to write in this Review about the first, 1989, edition of what has now become the essential reference work on the subject of charity taxation. That original review was warm but not uncritical, yet it continues to be proudly displayed by James Kessler on his website. In any event, the joint authors were sufficiently encouraged to revise their initial work five years later, and again six years after that. Such is the absurd gallop of modern statute law (case law developments seeming almost sedate by comparison) that the fourth edition, prepared for the first time by Kessler alone, appeared as quickly as 2003, and this one now, only two years later.

The original work has grown into much more than a stimulating curiosity. Doubts were voiced at the time as to whether there could be any money to be made at the bar from “legitimate” tax advice to charities (as opposed, say, to the “new method of funding” employed by Rossminster for the benefit of the St George’s Elizabethan Theatre Limited in the mid 1970s). But Kessler has succeeded in making the subject his own. There is great character in the writing, which almost lures practitioners into dialogue. This reviewer enjoyed engaging correspondence with the author on the scope of section 419, based on the commentary in the fourth edition on its apparent effects on an Oxford college.

To readers unfamiliar with previous editions, the material is organised into 29 chapters following a mostly logical and easily followed sequence. Charity definitions and direct taxation come first, followed by their subsidiaries, sponsors, employees and investments. The central section is devoted to the position of those who assist charities, as donors, beneficial lenders or testators, and a short final section addresses trusts and estates in course of administration. For the benefit of readers fortunate enough to be familiar with the 4^th edition, it is reassuring to note that although the opportunity has been taken to reorganise some of the material as between a few chapters (with a net gain of one) and further to enhance readability of style, no radical change has been undertaken. So, for ease of reference, all subject matter is more or less in the same place as before.

Reviewers, including this one, of previous editions have noted that some curious eccentricities remain; but that is a personal matter and does not detract. The main continuing deficiency is that the discussion of value added tax, curiously placed as Chapter 6, remains largely restricted to issues of fundraising. Given the length of the HMRC notice 701/1 on charities and the fact that it was fully updated in 2004, it would have been a most welcome addition for the contents to be discussed in as much detail as the corresponding direct tax Guidance Notes. As the author notes at the start of that chapter, “It is difficult to write about VAT and charities without writing a whole book about VAT”–and that was indeed the intention expressed in the 1^st edition, but sadly unrealised.

Although the new edition incorporates the four new Finance Acts and two “rewrite” Acts passed since its predecessor, there is a risk that it may quickly date. Because of imminent financial reporting changes, for example, it will no longer be possible for directors of subsidiary companies to enjoy the luxury of a nine-month wait after the year end before estimating the amount of taxable profits that may be Gift-Aided; it must be done within the period. And HMRC are currently consulting on a change to section 505(1)(e) to reflect a recent Special Commissioners decision on single trade. In respect of tax changes at least, the author thoughtfully includes on his web page an “update” section, the first item of which notes that new Gift Aid regulations are in force for individuals as of November 1, 2005. In one respect, conversely, he anticipated developments too eagerly in assuming that the Charities Bill could be enacted before the end of 2005 – when it had still to pass through all its stages in the Commons.¹

This 5^th edition can be recommended to all practitioners interested in charities as eagerly as its successor is already awaited.

MARK H ROBSON*

[2006] BTR page 482

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