UK: Weekly Tax Update - Monday 16 July 2012

Last Updated: 25 July 2012
Article by Richard Mannion


1.1. Delivering a cap on income tax relief

At Budget 2012 the Government announced a limit on currently uncapped income tax reliefs which will have effect from April 2013. The cap will be set at £50,000 or 25 per cent of an individual's income, whichever is greater.

The Treasury has now issued a consultation document setting out the scope of the cap. This consultation invites comments on the implementation and delivery of the cap, including, in particular, responses on:

  • how an individual's income will be defined and calculated for the purposes of the cap;
  • when the cap will apply; how reliefs will be ordered; and
  • the operation of the cap through Income Tax Self-Assessment (ITSA).

The Government stated in the Budget that the cap would not extend to those reliefs that are already limited. Specific caps have been put in place to reflect policy objectives, and the Government does not consider that these are open to excessive use. To further cap them would reduce the amount of support the tax system gives, for example, to pension savings. After extensive engagement with the charity sector following the Budget, the Chancellor has also decided to exclude charitable reliefs from the cap, to ensure that there is no impact on charitable donations.

The cap on reliefs will only apply to those reliefs that are used to reduce the amount of general income liable to tax. The cap will only apply to reliefs that are:

  • offset against general income (at step 2 of the income tax calculation and listed in s24 ITA 2007); and
  • not currently capped.

The reliefs affected by the cap will include, among others, loss reliefs that can be claimed sideways against general income, and qualifying loan interest relief.

Reliefs that do not meet both the criteria set out above will not be affected by the cap. The categories of relief that will therefore not be covered by the cap are:

  • Computational rules that affect the calculation of individual income streams. As such, they cannot be offset against general income. They include capital allowances, items with tax exempt status (for example statutory redundancy payments) and allowable expenses. These will not be affected by the cap. However, to the extent that computational reliefs, such as capital allowances, create or augment a loss that may be set against general income, that loss relief will be capped.
  • Where rules exist allowing computational reliefs to be carried forward from one year to the next, these will remain. So for example, individuals will continue to be able to offset trade losses against income from the relevant trade in a later year.
  • Structural credits (such as foreign tax credit and dividend tax credit) exist to prevent or mitigate the double taxation of certain forms of income that have already been taxed prior to the calculation of income tax. These will therefore not be subject to the cap.
  • Relief obtained directly under the Enterprise Investment Scheme (EIS) is already capped and is therefore also excluded. It should however be noted that losses on shares purchased under such a scheme are considered as currently unlimited, and so will be included in the relief cap alongside non-EIS shares. Venture Capital Trust (VCT) and seed EIS investments are also already capped and therefore excluded.
  • Similarly, the cap will not apply to Business Premises Renovation Allowances (BPRA), where the relief available is limited for each qualifying project. Any loss or part of a loss directly attributable to (or augmented by) BPRA claims will not be subject to the cap that will otherwise apply to trade loss or property loss reliefs.
  • Other examples include relief for pension savings that have annual and lifetime limits.

Charitable reliefs support donations to charity by providing tax relief on those donations. Despite what was said at the Budget the Government has excluded the following from the cap:

  • Gift Aid.
  • Relief for gifts of land and shares.
  • Payroll Giving.
  • Community Investment Tax Relief.

Reliefs subject to the cap

  • The following income tax reliefs will be capped to the extent that they can be relieved against general income:
  • Trade Loss Relief against general income– available for losses made by an individual
  • Early Trade Losses Relief – available to an individual in the first four years of the trade, profession or vocation.
  • Post-cessation Trade Relief – available for qualifying payments or qualifying events within seven years of the permanent cessation of the trade.
  • Property Loss Relief against general income– available for property business losses arising from capital allowances or agricultural expenses.
  • Post-cessation Property Relief – available for qualifying payments or qualifying events within seven years of the permanent cessation of the UK property business.
  • Employment Loss Relief – available in certain circumstances where losses or liabilities arise from employment.
  • Former Employees Deduction for Liabilities– available for payments made by former employees for which they are entitled to claim a deduction from their general income in the year in which the payment is made.
  • Share Loss Relief – available for what would otherwise be a capital loss on the disposal (or deemed disposal) of certain qualifying shares.
  • Losses on Deeply Discounted Securities – available only for losses on gilt strips and on listed securities held since at least 26 March 2003.
  • Qualifying Loan Interest – available for interest paid on certain loans. These include loans to buy an interest in certain types of company, or to buy an interest in a partnership, and loans taken out by personal representatives to pay inheritance tax.

How the cap will be calculated

The cap will be set at the greater of £50,000 or 25 per cent of an individual's income.

The starting point for this calculation will be the same for all affected individuals: their total income liable to income tax. This figure will then be adjusted based on an individual's net pay arrangements (i.e. the arrangements they make for pension deductions and/or charitable donations), to create a level playing field between those whose deductions are made before they pay income tax, and those whose deductions are made after tax. The result – "adjusted total income" – will be the measure of income for the cap.

The principle is that individuals are treated equally by taking account of:

  • the different ways that people make tax-relievable pension and retirement annuity payments and charitable donations;
  • the impact the above payments can have on the amount of their income for the purposes of income tax; and
  • how they receive tax relief at their highest rate of tax on those payments.

Following the consultation, draft legislation will be published later in the autumn.

1.2. Whether penalty should be suspended

The First Tier Tribunal has considered the case of Mr Philip Boughey. In his 2008/9 tax return Mr Boughey incorrectly claimed an exemption of £30,000 in respect of a redundancy payment which had already been taken into account via the PAYE system. As a result tax of £12,000 was underpaid and HMRC levied a penalty of £1,800.

Mr Boughey had appealed against the penalty and asked for it to be suspended, pursuant to the provisions contained in paragraphs 14 to 17, schedule 24 of the Finance Act 2007.

HMRC had written to Mr Boughey on 22 June 2011 as follows:

"The reason I have been unable to agree your request for suspension is as follows: to enable a penalty to be suspended, I have to ensure that the conditions for suspension are specific, measurable, achievable, realistic and time bound. This means that I need to set a condition that is specific to the careless inaccuracy - in your case, claiming the relief of £30,000 for a redundancy payment in error. Under the circumstances, I do not see that a specific condition can be set to enable you to show that you are able to correctly declare a redundancy payment and claim the correct reliefs against any such payments. I am unable to set a generic condition such as ensuring you pay HMRC all tax due during the suspension period by the appropriate due dates without setting a specific condition to cover the careless inaccuracy identified."

Paragraph 14(1) of schedule 24 provides that the respondent may suspend all or part of a penalty for careless inaccuracy. The extent of that power is limited by paragraph 14(3) which says "HMRC may suspend all or part of a penalty only if compliance with a condition of suspension would help P to avoid becoming liable to further penalties under paragraph 1 for careless inaccuracy."

The judge Geraint Jones found in favour of the taxpayer, ruling that HMRC's interpretation of the suspension provisions was flawed. Extracts from his decision are set out below:

"5. It is important to appreciate the breath of paragraph 1, which relates to penalties being imposed in respect of a host of different compliance failures. In other words, it sets the scene for the penalty regime and those failures or defaults that give rise to a penalty. It is important to appreciate the breath of paragraph 1 because any limit of the power, set out in paragraph 14(3), can only properly be understood by reference back to paragraph 1.

6. It is clear that as a matter of statutory construction the reference to "further penalties" in paragraph 14(3) is a reference to any penalty that could arise pursuant to paragraph 1, and is not limited to a penalty that could arise in the future for the same kind of default as has given rise to the penalty that the taxpayer has asked to have suspended.

9. In its Statement of Case the respondent refers to the decision of this Tribunal in Fane v HMRC [TC01075] where Judge Brennan, entirely accurately, held that there is an important feature in paragraph 14(3) of Schedule 24, being the link between the condition and the statutory objective, which requires that there must be a condition which would help the taxpayer to avoid becoming liable for further careless inaccuracy penalties. He went on to say that "if the circumstances of the case are such that a condition would be unlikely to have the desired effect (e.g. because the taxpayer in question has previously breached other conditions or has a record of repeated non-compliance) HMRC cannot suspend a penalty. The question therefore is whether a conditional suspension would have the required effect."

10. Judge Brennan went on to point out that on the face of the wording of paragraph 14(3) there is no restriction in respect of a "one off event". He went on to say that "Nonetheless, it is clear from the statutory context that a conditional suspension must be more than an obligation to avoid making further returns containing careless inaccuracies over the period of suspension (two years").

11. I agree with that analysis but consider it worthwhile pointing out that the Tribunal was not saying that a penalty cannot be suspended simply because the careless error relates to a one off event that is unlikely to be repeated. Indeed, Judge Brennan made it clear that he was saying no such thing. He went no further than to say that a condition should be more than an obligation to avoid making further careless mistakes during the period of suspension. I respectfully agree.

12. I should also add that when the Tribunal referred to a condition being designed to have "the required effect" that was plainly a reference to a condition being designed to avoid the taxpayer becoming liable to a penalty, by reason of carelessness, in respect of any of the matters set out in paragraph 1 to Schedule 24 that would be capable of giving rise to a penalty. Indeed, when the whole scheme of schedule 24 is considered in that way, it plainly militates against the view that a condition must be specific to the default that has given rise to the penalty which the taxpayer has asked to have suspended. Any such condition might do so; but it not necessarily have to do so.

14. When I look at the letter of 22 June 2011 it is plain beyond doubt that the respondent's decision is flawed. That is because the writer of the letter has proceeded on the basis that he must set a condition "that is specific to the careless inaccuracy". That is not a statutory requirement; nor is it implicit in the statutory regime set out in Schedule 24. The fact that the decision maker thought that a condition would have to relate to future redundancy payments becomes very clear from the following paragraph in which he/she says "Under the circumstances I do not see that a specific condition can be set to enable you to show that you are able to correctly declare a redundancy payment and claim the correct reliefs against any such payments."

15. It is clear from the foregoing that the decision maker proceeded on the erroneous legal basis that any condition of suspension must be designed to ensure that, in the future, the appellant correctly declared the receipt of any redundancy payments. That was far too narrow a view and discloses a highly material error of law.

16. The appellant has proposed a condition to apply during any period of suspension being that during that period his tax returns should be prepared by a qualified accountant. That is not a generic condition but it is a condition that would be designed to or would assist in the submitting of accurate returns, so as to avoid any penalty arising based upon any of the various possible defaults set out in paragraph 1 of Schedule 24.

20. Although this is a borderline case I have come to the conclusion that there is a proper and sufficient basis for the penalty to be suspended pursuant to paragraph 14(1) of Schedule 24. Accordingly I direct the respondent to suspend the penalty upon applying a suitable condition."

The condition laid down was that Mr Boughey's self assessment tax returns must be completed on his behalf by a Chartered or Certified Accountant.

1.3. Howard Peter Schofield [2012] EWCA Civ 927.

The Court of Appeal has considered the case of Mr H P Schofield [2012] EWCA Civ 927.

On 15 November 2000 the Appellant sold his shares in PL Schofield Limited to Cattles Plc for consideration of £11,840,000 in the form of bank guaranteed loan notes redeemable in December 2002. On 31 December 2002 the Appellant redeemed the loan notes realising a chargeable gain of £10,726,438. The Appellant, however, declared in his 2002/03 return an allowable loss of ₤11,305,017 to offset the chargeable gain arising from the redemption of loan notes.

The loss arose from the exercise of two options over gilts and the FTSE 100 index on 4 April 2003. Mr Schofield had left for Spain on 29th March 2003. He stayed there for the five or so years needed to establish non residence. The economic loss was covered by the exercise of two further options on 7 April 2003 when he was ostensibly non-resident.

Both the First Tier and Upper Tier Tribunals rejected the claim for loss. After considering the principles in Ramsay the First Tier Tribunal considered that the loss was not an allowable loss. The Upper Tribunal concluded that the relevant transaction to consider was the composite transaction of all four options together.

The taxpayer appealed to the Court of Appeal on the basis that the earlier Tribunals had failed to recognise that each option was a separate transaction and gave rise to four separate assets. HMRC contended that the application of the Ramsay principle was correct and that the earlier Tribunals reached the correct conclusion.

At the Court of Appeal the Chancellor of the High Court agreed with HMRC that Ramsay applied and the four options needed to be considered together. Lady Justice Hallett and Lord Justice Patten agreed, the former pointing out that the appeal was a thinly disguised attempt to undermine the Ramsay principle.


2.1. Inheritance Tax – simplifying charges on trusts

HMRC has issued a consultation document about whether there may be options for simplifying the calculation of IHT charges to which trusts are subjected at ten-yearly intervals and when property is withdrawn from trust.


3.1. Real time information (RTI)

HMRC has issued a press release on real time information reporting. Stephen Banyard, Acting Director General for Personal Tax, said:

"RTI is on track and the pilot is going very well. We started in April with just 10 employers and now we've successfully received over 1.7 million individual records from 338 PAYE schemes.

"Following the success of the first pilot stage, more PAYE schemes will join the RTI pilot, as planned, and by the end of September up to 1,300 employer schemes will be reporting PAYE in real time.

"We are also seeing external confidence in the pilot and we've responded to that by offering more large employers, payroll bureaux, new employers and software developers the opportunity to join the RTI pilot or to expand existing involvement in advance of the launch date in April 2013."

Most employers will begin reporting PAYE in real time in April 2013. All employers will be routinely reporting PAYE in real time by October 2013, in time for the introduction of Universal Credit.

3.2. PAYE at the cross-roads

The all party parliamentary taxation group has released a report on PAYE at the crossroads, which whilst recognising RTI is a step in the right direction, highlights some shortcomings in the way RTI is being implemented and providing recommendations. The recommendations are:

Recommendation 1: The APPTG recommends that business needs should be prioritised over the policy deadline for Universal Credit in RTI's migration timetable. We note that the majority of tax credits will not be migrated into Universal Credit until mid-2015 and should HMRC delay the migration of RTI up until this point, the effect on Universal Credit will not be substantial, due to the relatively low number of claimants, all of whom will be able to self report.

Recommendation 2: The APPTG recommends the following criteria prior to RTI migration:

  • The migration cost and additional administrative cost of RTI are fully understood.
  • A strategy for micro-business and the digitally excluded are executed.
  • Representatives from the software industry are content with the functionality of payroll products on the market.
  • All outstanding payroll issues are resolved and there is absolute clarity about how RTI will work and this has been fully tested by piloting.
  • The timeline for the Strategic Solution is fully understood and role of the Interim.

Solution is fully understood, functional and properly tested.

Recommendation 3: The APPTG recommends that HMRC set up an independent website for RTI migration as soon as possible. This should include a downloadable form for taxpayers, explaining their role within the PAYE system, RTI and providing fields for their personal information for the purposes of data migration.

Recommendation 4: The APPTG supports LITRG's recommendation that micro-business should be provided with a free RTI hotline for the purposes of migration onto RTI.

Recommendation 5: Given the lack of clarity over the SR10 forecast for RTI, the APPTG supports the Treasury Select Committee's recommendation for external audit and arrangements are in place for the external auditors to report regularly to the appropriate parliamentary committees.

Recommendation 6: The APPTG recommends that HMRC prioritise resource in its information management strategy for PAYE accuracy over employer compliance in relation to timely payment of PAYE. Investment in PAYE should deliver for the taxpayer.

Recommendation 7: The APPTG recommends that RTI under the Interim Solution is not extended across government, because there is no guarantee of accurate real-time data and this could also create further switching costs for moving towards HMRC's preferred Strategic Solution, which does guarantee accurate real-time data.

Recommendation 8: HMRC should include the creation a self-service account linked to NPS as part of its business case to HMT in relation to the Strategic Solution.

Recommendation 9: The APPTG recommends the establishment of a working group within the

Cabinet Office, endorsed by HMRC, to look at the benefits of both the Strategic Solution and

Centralised Deductions across government, to think creatively, and include a cross-governmental business case in the Strategic Solution's business case for HMT.


4.1. Partnerships and the ability to claim an annual investment allowance (AIA)

This case concerned whether a partnership was entitled to an annual investment allowance (AIA). The point at issue was whether a company was a member of the partnership or not. An AIA can only be claimed by partnerships of which all members are individuals (CAA01 s38A(3)(b)).

HMRC contended that as there was no formal partnership agreement, and as the partnership tax return indicated the company was a member of the partnership, and taking account of the Partnership Act 1890, the company was a member of the partnership and therefore the partnership was not allowed to claim an AIA. The facts were:

  1. Mr David John Stebbings, his wife Mrs Elaine Stebbings and a company R Stebbings (Plumbing and Heating) Engineers Ltd were the proprietors of Hoardweel farm in Berwickshire. Mr David John Stebbings and Mrs Elaine Stebbings were the only directors of R Stebbings (Plumbing and Heating) Engineers Ltd (the company).
  2. There was no formal partnership between the parties.
  3. Hoardweel Farm was a working farm whose financial accounts for the year ended 31 July 2008 disclosed cattle, sheep, pigs and crops as their trading stock. The net profit shown in these accounts was divided equally between Mr and Mrs Stebbings. The capital account showed assets for Mr and Mrs Stebbings as a joint figure of £578,709 and assets for the company as £232,805.
  4. The tax return for the tax year to 5 April 2009 was completed using the information from Hoardweel's financial accounts to 31 July 2008. An excerpt from that return showed the declaration of the company as a partner in Hoardweel.

The taxpayers (Mr & Mrs Stebbings) contended that the company was not a member of the partnership, but that the bank had required the company to be noted as a member on the tax return for security purposes. The Tribunal requested land registry information which should have clarified ownership with respect to the land, but none was available. In the circumstances the Tribunal agreed with HMRC and rejected the partnership's appeal.

4.2. Capital allowances and industrial buildings allowances (IBAs)

Next Group plc (NGP) and its subsidiaries Next Distribution Limited (NDL) and Paige Group Ltd (PGL) disputed the denial of industrial buildings allowance (IBA) claims in respect of large two storage units located in Doncaster. The dispute concerned claims for IBAs for the accounting periods ending 31 January 1998 to 2001. The decision discusses CAA1990 s18, which (for the purposes of the parts considered in this case) was re-written into CAA01 s271 and 274, which were in turn removed for chargeable periods beginning on or after 1 or 6 April 2011. However the case may be of interest for determining when goods may be regarded as subject to a process.

Land owned by NGP was leased to PGL and then leased on to NDL in August 1997 for the purpose of constructing two purpose built storage and distribution facilities used to supply the requirements of NDL. A total of £19.2m was incurred on constructing the facilities in the years ended 31 January 1998 and 1999. The warehouses received goods directly from the point of landing in the UK (port or air terminal) in bulk by the group's road transport fleet, and taking account of the group's VAT and duty deferment facilities.

Once in the warehouse the goods were broken down into small parcels according the specific requirements of NRL. Where correction of defective work was required (cleaning, reconditioning, replacing missing buttons or remedying missing or incorrect barcodes), this was done in the buildings or elsewhere. The activities of NDL were described (not exhaustively) as:

  1. Receiving goods;
  2. Breaking down bulk deliveries;
  3. Checking and Quality Control;
  4. Collation;
  5. Stock control;
  6. Organisation;
  7. Transport to initial storage;
  8. Storage (in large quantities for a phase launch);
  9. Managing;
  10. Picking i.e. the selection of items from storage whether for retail allocation or replenishment, or for Directory;
  11. Bringing together of items in accordance with the needs of the destination;
  12. Packing and/or re-packaging (for retail, in plastic totes; for Directory in plastic bags);
  13. Labelling;
  14. Despatching goods (for retail, pallets to depots; for Directory by courier etc.). The goods going to retail stores will include some Directory goods, for collection from stores;
  15. Dealing with Retail and Directory returns.

The taxpayers contended the buildings were used to subject to a process goods that were stored there. This was for the purposes of a trade which consisted in so doing.

The process consisted of "stepping down" the bulk delivery of goods into smaller parcels of goods (which might be just one item) so they were more marketable. These items could not be sold in the right way from the container or trailer. They had to be directed to a retail store or Directory customer having been checked to ensure that they met the quality standards. In the meantime they had to be held or stored.

It was also argued that the Buildings were used to store goods on their arrival in the UK from a place outside it. NRL's activities were not ancillary to a trade involving the sale of goods by NRL but were a trade which consisted in the storage and transport of goods which met the requirements of section 18 CAA. The storage was for this purpose not for sale by NDL.

The Tribunal concluded that goods consisted of the individual items making up a bulk delivery, not the bulk deliveries themselves. After considering a number of cases (the main ones being Bestway (Holdings) Ltd v Luff (1998) 70 TC 512 and Farnell Electronics Components Limited vs. HMRC [2011] UK FTT 14.09.11), the Tribunal concluded neither the repackaging of the bulk deliveries nor other activities amounted to subjecting the goods to a process for the purpose of capital allowances. They also contended that as the goods were removed from air terminals and ports by road to the warehouses, the arrival at the warehouses was not the first point of entry to the UK, so that the use of the buildings could not be described as storage on arrival in the UK from a place outside of it.

The appeal was therefore rejected.

4.3. Aggregates Levy

In 2002 the British Aggregates Association submitted views to the European Commission which challenged the introduction of the Aggregates Levy by claiming that the levy contained unapproved and unallowable State aid. The Commission decided not to object to the levy, concluding that it did not contain any State aid other than the credit scheme in Northern Ireland which it considered to be compatible with the common market. The British Aggregates Association brought an action in the European Courts for partial annulment of the Commission's decision and on 7 March 2012 the European General Court ruled that the Commission's original consideration of whether the levy contains State aid was flawed, and annulled the Commission's decision.

The Commission has decided not to appeal the judgment and it will now need to make a reassessment of whether the levy contains any State aid and, if so, whether it is compatible with their guidelines. In the meantime, the judgment does not render the levy illegal, as it did no more than annul the European Commission's State aid assessment. Although the levy remains under challenge in the UK Court of Appeal, its legal basis was confirmed by a High Court Order made in 2002. Accordingly, HMRC will continue to administer and collect the tax as normal. There is no change to registered businesses' legal responsibility to pay the levy. Where registered persons withhold payment of the levy declared as due on their returns late/non-payment penalties and penalty interest may become due.

4.4. SI 2012/1783 Authorised Investment Funds (Tax) (Amendment) regulation

5. VAT

5.1. Changes to Finance Bill 2012 – responses to consultation on borderline anomalies

Responses to the consultation on addressing VAT borderline anomalies have been published. These include amendments to Finance Bill 2012 (the changes will come into effect on 1 October 2012, apart from the changes to caravans which will come into effect on 6 April 2013) including:

Hot food

The Finance Bill will retain the existing test, which taxes food which is provided hot for the purposes of allowing it to be consumed above the ambient air temperature. But we will add to it a number of new objective tests to prevent the anomalies that have arisen as a result of case law over the years. VAT will be applied at the standard rate to hot food which is:

  • provided hot for the purposes of allowing it to be eaten hot (the existing criterion); or
  • cooked, heated or reheated to order – for example toasted sandwiches; or
  • kept hot, or where the natural cooling process is delayed – this would include instances where businesses kept food hot in hot cabinets, hot plates, heat lamps, etc. or where heat is applied in order to slow the cooling process (Cornish pasties and sausage rolls would therefore be zero-rated where they are cooling naturally in the racks, but not when they are stored in heated cabinets); or
  • provided in heat retaining packaging or other packaging specifically designed for hot food – where the use of such packaging is a clear indicator that food is being kept hot (for example foil-lined takeaway packaging); or
  • advertised, marketed or promoted in any way that indicates that it is supplied as hot.

Self storage

The Government did not intend stabling of livestock to be covered by the measure and so to put the matter beyond doubt the legislation will be amended to specifically exclude the storage of live animals. Government will, make minor changes to the connection test to ensure it works effectively and includes circumstances where the person renting the storage is not actually the person who uses it. The Capital Goods Scheme (Part XV of the VAT Regulations 1995) will be amended to allow businesses to opt to include capital expenditure under £250,000 within the CGS. This will put small operators in the same position as larger operators. This amendment to the CGS will only extend to businesses affected by this measure.

Holiday caravans

Rather than having a single dividing line between a zero rate of VAT on residential park homes, and 20% on static holiday caravans, the Government will introduce VAT on static holiday caravans and touring caravans longer than 7 metres at the reduced rate of 5%. To give the industry more time to adjust the measure will be delayed until 6 April 2013.

Approved alterations to listed buildings

The Government will amend the transitional arrangements to make them more generous and provide relief to more projects already underway at Budget by specifying an earlier trigger point for projects to benefit from transitional relief and by extending the length of the transitional period. The Government has also considered a number of options and concluded that in order to be fair, the trigger point should apply equally to all types of project. Projects will therefore now also continue to benefit from zero-rating if listed building consent (or the equivalent approval for listed places of worship) had been applied for before 21 March 2012 (Budget day). This is in addition to the works which qualify because there was a written contract in place before Budget day or because it was a substantial reconstruction project meeting the 10% test.

The Government will also extend the end of the transitional period to 30 September 2015, allowing qualifying projects to continue to benefit from zero rating for 3 ½ years, or 4 summers. This should ensure that the majority of qualifying projects underway at Budget should qualify for transitional relief.

The Government had always planned that the position of listed places of worship would not be materially changed as a result of applying VAT to approved alterations. They were already eligible for grants towards the VAT cost of repairs and maintenance through the Listed Places of Worship Grant Scheme. It is logical to extend this grant scheme to alterations, when the VAT treatment of alterations and repairs is put on the same footing, and the government has agreed to increase this fund by £30m a year.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.