Other Matters
Child Trust Fund
Every eligible child born on or after 1 September 2002 has a Child Trust Fund
account. Family and friends can contribute up to £1,200 into the account each year.
The government will make payments of £100 per year into the Child Trust Fund accounts
of all disabled children. Severely disabled children (those who receive the High
Care element of Disability Living Allowance) will receive £200 per year. These payments
will not count towards the £1,200 yearly contribution limit. The payments will start
in April 2010.
Charities: substantial donors
The substantial donors rules potentially apply to all charities carrying out transactions
with their largest donors (where tax relief is available in respect of their donation(s)).
If a charity enters into a specified transaction with a substantial donor the transaction
will be treated as non-charitable expenditure which is subject to a tax charge.
Existing legislation defines a substantial donor as a person that makes tax relievable
donations of:
- £25,000 or more in 12 months or
- £100,000 or more in a period of six years.
Such a person is treated as a substantial donor of the charity for all chargeable
periods falling wholly or partly within that 12 month/six year period, and for a
further five chargeable periods. A chargeable period for a charitable trust is a
tax year and for a charitable company is its accounting period.
Regulations will increase the threshold of relievable gifts which a person may make
before becoming a substantial donor. The relievable gifts threshold of £100,000
in a period of six years will be increased to £150,000 from 23 April 2009.
The annual threshold of £25,000 will remain the same.
Comment
These rules were introduced to tackle those who influence or set up charities
with a view to avoiding tax rather than with any charitable intent but the rules
need to be considered carefully if substantial donations are being made.
Landfill tax
Legislation will be introduced to increase the standard rate of landfill tax by
£8 per tonne to £48 per tonne. The new rate will have effect for any standard rated
disposal of waste made, or treated as made, on or after 1 April 2010.
The Business Payment Support Service
The Business Payment Support Service was launched following the Pre-Budget Report
in November 2008. It is designed to assist businesses which whilst viable are currently
having difficulties paying tax liabilities due to economic conditions. The aim is
to allow businesses to spread payments over a period of time to suit individual
business circumstances. This service will continue and in making an agreement with
HMRC, consideration will now be factored in where a loss is anticipated for the
current period.
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