Charitable Tax Relief: Another tale of woe.

Above is Rachel Reeves (Mrs Nicholas Joicey) Member of Parliament for Leeds West and Shadow Chief Secretary to the Treasury. One of our local MPs, Rachel has recently been interviewed on TV and was clearly delighted with the Chancellor of the Exchequer’s latest U turn vis-à-vis lifting the cap of the tax relief insofar as charitable donations is concerned.
The British Gazette would point out to Rachel that her enthusiasm is misplaced. Why? Because charitable relief has become the latest (and easily the safest) method of tax evasion. NB: we use the term tax evasion as opposed to the legal tax avoidance.
Rachel’s (and that of her colleagues) attitude quite frankly mystifies us. You see, as a member of the Labour Party one would imagine that Rachel would be all for the clamping down on tax dodges. But this is clearly one which she is apparently quite happy with. Extraordinary!
“What do you mean?” We hear you say. “Surely the Charity Commission will ensure that any donation a rich banker gives will be for genuinely charitable purposes?”
Well you see Dear Reader. It depends upon which Charity Commission you are referring to. If by chance you are referring to the Charity Commission for England and Wales, the Office of the Scottish Charity Regulator or the Charity Commission for Northern Ireland, you can rest assured that these excellent organisations are beyond reproach and will ensure to the best of their ability that all charities registered with them are bona fide. All three will take rigorous action against any charity and persons connected with them who are bogus. Rest assured, any dishonest persons seeking to take fraudulent advantage of the tax system will most certainly find themselves helping police with their enquiries. If charged and subsequently convicted, they can expect to be a guest at one of Her Majesty’s penal establishments.
So then, what is the problem? You ask.
At this point Dear Reader, we would suggest that you take your blood pressure tablets.
Well you see, it all started with a certain, Herr Hein Persche back in 2009. You see, Herr Persche, a denizen of Lüdenscheid in North Rhine-Westphalia, wished to make a donation to a charity in Portugal.
Herr Persche tried to claim tax relief on the donation he had made to a Portuguese charity. This was denied by the German tax authorities. He then took his case all the way to the European Court of Justice, which ruled it was unlawful for a European member state to discriminate against a charity based in another member state in this way.
This means that British donors can now give to charities that are not based in the UK, and therefore not regulated by the Charity Commission, and still claim tax relief.
According to Treasury insiders, this has led to cases of wealthy people setting up charities abroad into which they pay money, but which are then used to fund their own companies, or even leisure activities, rather than for any serious charitable purpose. In one case, for example, a person ran a “fundraising function” through their charity that looked suspiciously like a personal party.
So we state again, it depends upon which Charity Commission you arte talking about. Is it the one in Sofia in Bulgaria, Bucharest in Rumania or Athens in Greece? Or maybe it is the one that is run by that nice former KGB officer in Lithuania?
So our advice to Rachel is this: If you hand the government of your country over to a foreign power, what do you expect?