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20010 Bulletin Single Pages evidence framed in a way which the cynical might deduce as TECHNICAL HAPPENINGS AND RUMOURS IN being no more than a means of deterring even the most THE ‘HERITAGE WORLD’: determined lobbyist. However, some readers may not be familiar SOME NOTES ON DEVELOPMENTS OVER THE with ‘language that government understands’ in this area – in a PAST HALF YEAR nutshell promotion of public access and cultural diversity as by Edward Manisty fundamental objectives. Director, Heritage and Taxation Advisory Service, Christie’s On pages 26 to 34 inclusive of his Review, Sir Nicholas examined the possible expansion and modification of the fiscal incentives available towards retaining important chattels in this country and for encouraging gifts and sales to public collections. He came up with some thirteen Recommendations to this end, the NEWS FROM THE DEPARTMENT OF CULTURE, implementation of which would require modifications to MEDIA AND SPORT (‘THE DCMS’) existing law and practice. Earlier in the year the House of n 28 July 2005 Heritage Link, a charity engaged in Commons Culture, Media and Sport Select Committee Opromoting the historic environment, issued a statement in demanded a Treasury response to these Recommendations3, regard to its recent meeting with the new Culture Minister, and notably that in regard to the extension of Gift Aid so that David Lammy. The Minister was noted as saying that “...he looks the donation of significant artworks to public collections might for support from the sector to promote the heritage ‘offer’ be offset against income and corporation tax4. It fell to the across government and in particular to the Treasury“. He DCMS to include the Treasury’s belated answer to these stressed first “coherence and unity” and secondly ”building an Recommendations in a paper containing the Government’s evidence base and promoting it in a language that government response to the Select Committee’s observations generally5. This understands”1. drew attention to the publication by HMRC of a new page in its Business Income Manual containing guidance on the treatment On the first issue Mr Lammy undoubtedly has a point. On the of the costs of maintaining a business archive and facilitating same day he drew attention to an independent report public access to it in computing the profits of a business for tax commissioned by the DCMS and its satellite quango, the purposes6. This mealy mouthed statement does little more than Museums, Libraries and Archives Council (“MLA”)” that merely confirm the law. In any event, this timid gesture examined the case for a national purchasing agency for public represents the sole positive response of the Treasury to date to libraries. This revealed that by acting together and pooling Sir Nicholas’s suggestions for modifications to direct taxation resources 149 library authorities across the country could save law and practice to meet the objectives of his Report7. The between £7 million and £20 million, if they instituted a apparent contempt of the Treasury for the remainder of Sir programme of joint orders and shared systems2. It might also Nicholas’s Recommendations in this area would seem evident have been fair comment if the Minister had drawn attention to enough from the following passage from the DCMS paper:- concern in the museums and libraries sector to two other key matters within his remit – the lack of any substantive response “The Government has in place a wide range of tax reliefs for giving from the Treasury to the recommendation for changes in direct to all charities, including museums and galleries. The Government taxation contained in the Goodison Review, being Sir Nicholas believes these are generous and there is scope for these to be used Goodison’s January 2004 Report to the Treasury Securing the more widely. Where works of art are donated, these are exempt Best for our Museums: Private Giving and Government Support, from capital gains tax and inheritance tax. In addition, the and the emerging signs of a run down in grant aid from the Acceptance in Lieu enriches museum and gallery collections. We Heritage Lottery Fund for new acquisitions by public collections. will keep any proposals for new reliefs under review”8. In regard to his second issue, the building of an evidential base Readers may be tempted to ask why, if everything in the garden for change and the language of promoting it, the Minister is on was so lovely, Sir Nicholas was asked to address such issues in rather more controversial ground. Readers with experience of the first place. The taxpayer can obtain income tax relief on lobbying government departments, and particularly the giving land, buildings, shares and securities to charity – why not Treasury, will often have encountered requisitions for data and works of art? Surely we should be told? 2 WINTER ISSUE 2005 The reader may only speculate on the reasons why – out of the The second worry is more straightforward. Of the £2.375 billion blue, as it were – the Treasury commissioned Sir Nicholas to total of ‘public subsidy’ towards the Olympics estimated by the carry out his Review. One likely cause may have been that Government, no less than £1.5 billion is to be extracted from indications were emerging that the ‘wide range of tax reliefs’ the Lottery between now and 2012. In addition to the £410 referred to in the DCMS paper as being so ‘generous’, together million to be ‘diverted’ for this purpose as part of the 2009 with other available ‘defences’, are simply insufficient in review already mentioned, £340 million is due to be contributed the 21st Century to stem the flow of important objects from to the total by the Sport ‘good cause’, and the remaining £1750 this country. Whatever the reason, the sense of gloom in the million is to be raised by the new Olympic Lottery Game13. sector has heightened since Sir Nicholas embarked on his Camelot has estimated that up to 59% of the receipts of the endeavours. Curators and museum trustees faced with the new Game would be derived from players of existing Lottery opportunity to acquire a major work, even in circumstances games switching their allegiance to the new game14. The where it is possible to call in aid existing export controls implications for the HLF would seem clear enough and with and fiscal incentives, are concluding increasingly that Lottery them the very limited prospect of major new acquisitions by UK and other funding is unlikely to be forthcoming at the museums for the period until 2012 at least. requisite level, and that this being so, there is little point in July saw the launch at its annual party of MLA’s Acceptance in pursuing the opportunity. Lieu Report 2004/2005. This gathering seldom fails to produce Changes to the original framework surrounding the distribution some surprise. Last year there was the wholly unexpected, but of lottery receipts among the ‘good causes’ and deviation from ringing endorsement by the then Culture Minister, Estelle the principle of so-called ‘additionality’9 in applying Lottery Morris, of the in situ acceptance in lieu arrangement15. This year receipts are widely perceived to be major contributors to this the Chairman of MLA, Mark Wood, surprised those present by state of affairs. Such factors are seen to have ‘diluted’ the ‘take’ announcing MLA’s intention of supporting efforts to lobby of the Heritage Lottery Fund (“HLF”) and thus its capacity and Government to introduce tax incentives designed to facilitate inclination to fund acquisitions by museums. The National Art the retention of important chattels in this country. Collections Fund (“NACF”) states in a recent paper that the MLA’s 2004/2005 Report mentions16 the qualified delegation to income of the HLF - a key source of funding for acquisitions over MLA under The Contracting Out (Functions in Relation to the last decade - has declined by some 41% since 1997 and that Cultural Objects) Order 2005 (‘the Order’)17 noted in these in 2004/2005 only 0.46% of HLF expenditure went towards columns in the last issue18. Particular attention is drawn to the supporting acquisitions10. Reference is made in the paper to two delegation to MLA under the Order of the powers of Ministers at additional factors giving cause for concern:- the DCMS to approve the acceptance in lieu by HMRC of objects • the review of the Lottery generally in 2009 on the expiry of in lieu of tax under IHTA 1984 s.230, and to allocate such items current licences. This is a procedure to be carried out under to public institutions under the National Heritage Act 1980 s.9. the auspices of the DCMS and commences this year, and The benefits of the new dispensation are already evident in • the introduction, pursuant to the Horserace Betting and regard to English cases, where MLA is able to ensure that the Olympic Lottery Act 2005, of a new Lottery game dedicated final stages in the acceptance in lieu process are concluded to providing finance for the 2012 Olympic Games to be held without the longueurs suffered in the past in obtaining in London. Ministerial consent to such virtually mechanical steps. At the time Readers might have assumed that the first worry perhaps merely of writing there is no sign of further delegated legislation vesting reflected concerns on the part of the NACF, in common with such functions in MLA in regard to Scottish, Welsh and Northern many others11, that the principle of additionality would Irish cases. Such action would remove the delays that remain the continue to be eroded by Government, so that in 2009 the norm in regard to offers involving chattels connected with parts HLF might find that it had even less scope to support of the United Kingdom other than England.
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