Venables and Kessler
5th Edition
The fifth edition of this text is up to date to 15 August 2005. Since the last edition was published in 2003 a considerable amount of material has been added to cover changes made in HMRC Guidance (primarily in the area of Gift Aid) and Statements. In addition the provisions in the FA 2003, FA 2004 and F (No 2) A 2005 plus the rewrite of the legislation in ITEPA 2003 and ITTOIA 2005, have led to the scope of the text being expanded and changes having to be made.
The Finance Act 2003 introduced SDLT from 1 December 2003. Practitioners will be aware that changes were made even before the legislation took effect and changes were subsequently made to the changes. There have been numerous changes made to the SDLT legislation since then. In fact, the changes have been so numerous that it is very difficult for practitioners to keep track of the changes. The SDLT provisions represent a significant issue for many charities, in no small measure as a consequence of the introduction of anti-avoidance rules (guidance has recently been issued on the circumstances in which the anti-avoidance rules in relation to withdrawal of group relief will operate). Of particular interest for charities is the need for care where land is acquired and only part is to be retained for charitable purposes. Coverage of the issue of withdrawal of relief as a result of a disqualifying event is one which many charities and practitioners will find useful.
The contrast with the detailed rules for registered social landlords (RSLs) needs to be noted. SDLT is an area that will, no doubt, be expanded on in future editions as further changes look inevitable.
The Finance Act 2004, introduced wide-ranging changes to transfer pricing. As practitioners will be aware, transfer pricing now applies in a domestic context. An issue identified at an early stage was the potential impact on charities. Many charities will not qualify for the small or medium size enterprise exemptions. Further, many charities either receive services from, or provide them to, associated enterprises - charities and non-charities. Often the recharge is merely intended to cover costs. In part, the scope of the rules depends upon whether the entity is an enterprise. Not surprisingly given the need to make the rules robust against challenge from the ECJ, what is an enterprise is a complex issue. The circumstances in which a charity is regarded as being an enterprise is clearly set out in the text (at para 7.14).
As noted in the introduction, above, a major issue for Charities is the application of the gift aid rules. There was much concern at the exchequer cost regarding the “day entry/membership” arrangements. For many Charities, the compliance requirements are a major issue. Chapter 14, which deals with cash gifts from individuals, runs to almost 100 pages. Donations from companies and the various forms of "gifts" by businesses - secondments, services, stock, plant and machinery etc. are dealt with
succinctly.
The size of the book, in excess of 500 pages, is testimony to the complexity of the subject matter. However, despite the complexity of the issues addressed, the content of the book is structured systematically and is, as one would expect from this well known author, extremely easy to read.
The structure of the book follows a conventional approach of dissecting the subject into the core issues: definitions of ‘charity’, taxation of charity income, capital gains, VAT and stamp duties. The author then takes a number of specific issues – trading by charities, trading companies, business sponsorship and advertising, etc (24 topics in all) – and examines each topic in considerable detail. This structure ensures that the text is comprehensive. Each chapter contains detailed analysis of the relevant HMRC guidance and commentary on legislation and supplements this with practical guidance from the author.
Of particular value is the commentary on HMRC guidance. For many practitioners there is the practical need to contain costs. Charities are, in general, conservative in their approach and there is thus a need to keep structures simple and on a well trod path: HMRC guidance is usually the first and last point of call. There is a danger in simply accepting the view of the tax authorities and this text provides clear and forthright commentary on the views expressed by HMRC. This provides a solid base from which to consider whether those views should be challenged.
In summary, the range of topics dealt with and the clarity with which the issues are considered in this text make this a must-have book for every tax practitioner.
The views expressed are those of the author and not necessarily those of Baker Tilly. The author is a Director at Baker Tilly and can be contacted at 2 Bloomsbury Street London WC1B 3ST
Tax Journal, Issue no. 825, 20 February 2006
Here is
information on how to order The Taxation of
Charities and other books by James Kessler.