HL Deb 03 May 1990 vol 518 c1227WA
Lord Teviot

asked Her Majesty's Government:

What representations they have received from charitable organsiations about the Value Added Tax and corporation tax implications of affinity credit card schemes.

The Paymaster General (The Earl of Caithness)

We have received various representations, including a submission from the Charities' Tax Reform Group (CTRG). Customs and Excise and the Inland Revenue have had discussions with the CTRG about the tax implications of charities' affinity card schemes. It has now been agreed that, with the appropriate contractual arrangements, VAT will be charged on the promotional and other services supplied by the charities but will not apply to contributions made by the credit card companies for which the beneficiaries are not obliged to do anything in return. The corporation tax treatment of individual schemes will depend on the contractual arrangements, but schemes can be set up in such a way that the charity's income from them qualifies for exemption from corporation tax.