§ 8. Mr. Peter L. Pike (Burnley)What changes he proposes to introduce in taxation policies in relation to charities. [41680]
§ The Financial Secretary to the Treasury (Dawn Primarolo)A review of charities taxation was announced in the July 1997 Budget. The contributions to the first phase of the review are currently being analysed and we expect to publish a consultation document in the next few weeks.
§ Mr. PikeDoes my hon. Friend accept that, at times, charities feel that they are raising money for taxation? The Government's response to the sale of the new version of "Candle in the Wind" and the Princess Di memorial fund showed that that they could respond positively. Does my hon. Friend agree that people want to see the money that they give to charity sales go to the charities and not to the Government?
§ Dawn PrimaroloAs my hon. Friend knows, the Government's decision to donate the VAT paid on the purchase of "Candle in the Wind" to the Princess Diana memorial fund was a unique gesture. However, he should also be aware of how much the Government value the contribution that charities make to our society. More than 3,500 submissions have been made to the review discussing the future tax relationship between charities and the Government, and the Government will ensure that it is a positive relationship, which is recognised in the contributions made.
§ Mr. Peter Brooke (Cities of London and Westminster)What is the scale of concern in the Inland Revenue about loopholes in charities taxation?
§ Dawn PrimaroloThe purpose of the review was to consider how to simplify the regime, and to provide a fairer and easier relationship between charities and the Government. It is considering both direct and indirect tax. VAT was of particular concern to charities, as were some of the reliefs on the borderline that cause problems and loopholes for others to exploit. Those are all very much part of the discussion, and will be included in the consultation document shortly to be published.