The measure

Currently there is complex legislation which disallows tax reliefs on donations and makes charities' expenditure unallowable where charities enter into some transactions with substantial donors. It places a considerable administrative burden on charities which have to keep track of donations by donors, taking place over a number of years.

HMRC propose changing the definition of 'substantial donor'. The current test looks at the level of donations made by a donor. The new test will look at whether the main purpose of an arrangement is to return value to a donor.

HMRC will now work with charities to produce draft legislation.

Who will be affected?

Charities and their donors will be affected.

When?

No timing has been specified.