 |
||||||
|
home | news | site index |
||||||
|
Mr Alan Milburn Lab-Darlington Gifts of money to relieve refugee poverty. To move the following Clause:- '.--(1) Section 48 of the Finance Act 1998 (gifts of money made for relief in poor 1998 c.36 countries) shall be amended in accordance with subsections (2) to
(4) below. (2) In subsection (1)-- (a) in paragraph (a), for "the first designation date" there shall be substituted " 31st July 1998"; (b) in paragraph (b), for "one or both" there shall be substituted
"one or more". (3) In subsection (2)-- (a) in paragraphs (a) and (b) for "designated countries or territories" there shall be substituted "countries or territories designated for the purposes of this paragraph ,"; and (b) at the end of paragraph (b) there shall be inserted ", and (c) the relief of poverty in the case of persons from any country or territory designated for the purposes of this paragraph who are refugees or who have suffered displacement as a result of organised intimidation or oppression or of war or other armed conflict." (4) In subsection (9) for "this section" there shall be substituted
" paragraph (a), (b) or (c) of subsection (2) above". (5) Any order made before the passing of this Act under subsection
(9) of that section (designation of countries or territories in respect
of which section 48 has effect) shall have effect as if made for the
purposes only of subsection (2) (a) and (b) of that section. (6) Any notification given for the purposes of that section, in relation
to a charity, before the passing of this Act shall be treated as a
notification given for the purposes of that section as amended by
this section. (7) This section has effect in relation to gifts made on or after
6th April 1999. (8) An order made under subsection (9) of that section for the purposes
of subsection (2) (c) (as inserted by subsection (3) (b) above) may
have effect retrospectively in relation to such times falling on or
after that date as may be specified in the order.' Schedule [20], page 161, line 10,
at end insert-- '( ) GIFTS OF MONEY TO RELIEVE REFUGEE POVERTY
These repeals have effect in relation to gifts made on or after 6th
April 1999.' ____________________________ EXPLANATORY NOTE SUMMARY 1. The purpose of the New Clause is to extend the Millennium Gift
Aid scheme by adding an additional purpose for which donations may
be made under the scheme. This additional purpose is the relief of
poverty in the case of persons from any designated country or territory
who are refugees or who have suffered displacement as a result of
organised intimidation or oppression or of war or other armed conflict.
It is intended to designate the territory of Kosovo. 2. The extension to the Millennium Gift Aid scheme will ensure that
the scheme covers donations to charity appeals for the relief of the
Kosovan refugees, wherever in the world they are situated. The extension
will apply to donations made on or after 6 April 1999. ____________________________ DETAILS OF THE CLAUSE 3. Subsection 1 provides that section 48 Finance Act 1998,
which sets out the conditions for the Millennium Gift Aid scheme,
shall be amended in accordance with the following subsections. 4. Subsection (2) (a) updates section 48 (1) (a) by replacing
the words "the first designation date" with "31st July
1998" (the actual first designation date). 5. Subsection (2) (b) replaces in section 48 (1) (b) the words
"one or both" with "one or more", reflecting the extension of the
scheme to include the purpose now being added. 6. Subsection 3 replaces in section 48 (2) (a) and (b) the
words "designated countries or territories" with "countries or territories
designated for the purposes of this paragraph". This makes it clear
that different countries and territories can be designated for the
existing purposes and the purpose now being added. 7. Subsection (3) also inserts into section 48 a new subsection
(2) (c), containing the additional purpose. This is the relief of
poverty in the case of persons from any designated country or territory
who are refugees or who have suffered displacement as a result of
organised intimidation or oppression or of war or other armed conflict.
8. Subsection (4) replaces in section 48 (9) the words "this
section" with "paragraph (a), (b) or (c) of subsection (2) above".
This makes it clear that different countries and territories can be
designated for the existing purposes and the purpose now being added.
9. Subsection (5) provides that any order designating a country
or territory made before the passing of the present Act shall apply
only to the original two purposes of the Millennium Gift Aid scheme
(the relief of poverty and the advancement of education in the world's
poorest countries). Any such order shall not therefore apply to the
purpose now being added. 10. Subsection (6) provides that any notification under section
48 (1) given to the Inland Revenue by a charity before the passing
of the present Act shall be treated as a notification for section
48 as amended by this present section. This ensures that charities
already using the Millennium Gift Aid scheme can take advantage of
the extension of the scheme without having to give any further notification
to the Inland Revenue. 11. Subsection (7) provides that the new section has effect
in relation to donations made on or after 6 April 1999. 12. Subsection (8) provides that any order designating a country or territory in relation to the purpose now being added can specify that it has retrospective effect to any date falling on or after 6 April 1999. 13. The New Clause also inserts into Schedule [20] two consequential repeals arising from the extension of the scheme. The first removes from the end of section 48 (2) (a) the word "and", reflecting the insertion of the new subsection (2) (c). The second removes from section 48 (8) the definition of "the first designation date", reflecting the replacement of those words in section 48 (1) (a). These repeals apply in relation to donations made on or after 6 April 1999. ____________________________ BACKGROUND NOTE 14. The Millennium Gift Aid scheme (MGA), which came into effect
on 31 July 1998, is a special form of tax relief for donations to
UK charities working to relieve poverty or advance education in the
world's 80 poorest countries. Unlike the ordinary Gift Aid scheme,
where the minimum donation is £250 and must be made in a single
payment, for MGA the minimum donation is £100 and can be made
by instalments. MGA is a time-limited relief and donations must be
made by 31 December 2000. 15. As with ordinary Gift Aid, donations are treated as made net
of basic rate tax, which the charity can reclaim from the Inland Revenue.
Under the existing legislation, where an MGA donation is made by instalments
the aggregated donation is treated as made at the time of the last
of the instalment payments, and it is the basic rate of tax prevailing
at that date which the charity can reclaim from the Inland Revenue.
Clause 52 of the Finance Bill 1999 introduces an amendment to this
rule so that it is the basic rate prevailing at the date of the first
of the instalment payments which the charity can reclaim. This change
will give certainty to donors and charities from the outset as to
the rate of tax relief that the charity will enjoy. 16. MGA applies to the world's 80 poorest countries, taken from a
World Bank list. This includes Albania and Macedonia, where most of
the refugees fleeing from Kosovo have gone. But it does not include
Montenegro, or Kosovo itself, where many refugees and displaced persons
are situated. And it does not include wealthy countries, such as the
UK, where some of the refugees are being taken. There is therefore
a risk that MGA will not cover all of the fundraising appeals by UK
charities for Kosovan refugees. 17. In view of the pressing humanitarian problem, the Chancellor
announced on 6 April (in a Treasury Press Notice) that MGA is to be
extended with effect from the date of his announcement to cover donations
to UK charities for the relief of the poverty of the Kosovan refugees,
wherever in the world they are situated. 18. The New Clause therefore sets out an additional purpose for which
donations may be made under the scheme, namely the relief of the poverty
of refugees from any country or territory designated for this purpose.
It is intended to designate Kosovo, but the New Clause gives the flexibility
to designate other countries and territories should another similar
humanitarian crisis occur elsewhere in the world before 31 December
2000. 19. The New Clause applies not only to the relief of the poverty
of people who have fled from Kosovo, but also of people who are displaced
within Kosovo, and covers the relief of these people after they return
to their homes in due course. It covers the distribution of food and
clothing, the provision of shelter and housing, medical treatment,
education for refugee children and many other forms of relief. 20. The consultation document for the Review of Charity Taxation, which was published on Budget Day, sets out options for change on various issues, including a proposal to extend the advantages of MGA to all charities after 31 December 2000. |
||||||
© Crown Copyright | home |