§ Mr. Alfred Morris
To ask the Chancellor of the Exchequer if he has any plans to legislate for the removal of taxation on charitable fund raising by appeals like that 371W for Children In Need or to make compensatory ex-gratia payments to such appeals of equivalent amounts to any taxation deducted.
§ Mr. Major
[holding answer 20 December 1989]: Donations to charitable appeals are not liable to income tax, corporation tax or VAT, provided the donors receive no benefit in return. One-off fund-raising events held by charities are exempt from VAT, and non-charitable bodies can also obtain VAT exemption when organising one-off events as agents of an appeal fund which has charitable status. Income tax or corporation tax may be payable where the fund-raising activities amount to trading but, by concession, the Inland Revenue does not charge tax on the profits where certain conditions are satisfied. Full details of the concession (C4) are contained in the Inland Revenue leaflet IR1 1988.