Church faces El Om tax blow

BY ANDREW M BROWN
DIOCESAN treasurers warned this week that the English Church may lose up to £10 million a year, if the Government changes the rules on how collection money is taxed.
Under a longstanding system, tax relief is paid to the Church on offertory donations made by Deed of Covenant. But some treasurers are concerned that, under a review of charity taxation announced by Gordon Brown last year, the tax advantage will be eradicated and replaced by a less favourable system. The result of the review is expected from the Inland Revenue imminently.
One possibility is that tax relief is returned to the donor rather than given to the charity, which could complicate the donation process. John Conlon of chartered accountants Baker Tilly said such a change would be "a severe set-back" for the Church.
Mgr Kieran Heslcin of the Leeds Diocese finance department said any change in legislation that eroded the rebate system on covenants could mean a loss, in his parish alone, of £20,000 a year. "There's big money in it," he said. "It would mean a great loss of the Church's income. My guess would be half a million in this diocese." Dr Jim Whiston, treasurer in Middlesbrough, said income in his diocese was going down anyway because of falling attendance, but the covenant system was an important benefit. "The present system is reasonable," he said. "I don't think it's archaic."
Bishop Charles Henderson, chairman of the Bishops' Conference Finance Committee, said nobody should panic before details of proposed changes were known. "Our people have always been a generous people," the Bishop said. "They have always adapted. But it would be wrong if it was made more difficult for them."
Editorial Comment — P4