Simon Harris (Wicklow, Fine Gael)
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Revenue will not be seeking recourse to the individual who made a donation in good faith. I am happy to clarify that. It is not a case that if one made a donation to a charity, presuming it was still a charity, Revenue will come knocking on one's door. That is not the case.

I will outline for the Deputy the effect of this section. The amendments being made apply only to approved bodies which are authorised as eligible charities by Revenue. In other to obtain an authorisation an applicant body must satisfy Revenue in regard to a number of matters, and we know about these, including that it is established only for charitable purposes, its income is applied only for charitable purposes and before applying for authorisation it has been granted tax exemption in respect of its income under section 207 of the Taxes Consolidation Act for a period of at least two years.

Where Revenue is satisfied that an eligible charity has ceased to comply with the conditions attached to its authorisation, for example, where it loses its tax exemption status, it can then withdraw the authorisation of charitable status by written notice to the body. However - this is the element we are trying to rectify - the withdrawal may only apply and have effect from the date specified in the notice which must be later than the date of the notice. There is a lacuna in that there is a period of time between the date on the letter and the date where the withdrawal takes place. In other words, the withdrawal of the authorisation for the purposes of the donation scheme is prospective only. As matters stand, therefore, the situation can arises where Revenue withdraws a body's tax exempt status under section 207 with retrospective effect to the date from which the body fails to meet the requirements under that section but it can only withdraw the body's authorisation for the purposes of donations from a current date.

This situation can arise notwithstanding the fact that a qualifying condition of authorisation as an eligible charity for the donation scheme, in the first place, is that the income of the body is applied for charitable purposes only. That concept is already there. In such cases a charity could have lost its tax exempt status but could still be claiming refunds of tax and contributions made to the body.

The purpose of the amendment is twofold. First, it is to remove the current restriction that requires the withdrawal of an authorisation for the purposes of donation schemes from an eligible charity to be prospective only. In other words, if this is enacted, in future Revenue will be able to withdraw an authorisation retrospectively. Second, to ensure that the retrospective withdrawal of an authorisation impacts solely on the affected charity and not on the donors who made their donations in good faith, which is the point the Deputy made, the amendment ensures that donors who have claimed or will claim tax relief by way of deduction on a donation made to the charity up to the date of the notice withdrawing the authorisation retain the relief or the entitlement to claim relief. The amendments have effect from 1 January 2005 and authorisation issued under Schedule 26A before, on or after that date.

The Deputy asked from where this arises. Much has happened in this House. There has been an additional scrutiny applied to the charities sector and a new charity regulatory structure has been set up. We want a situation whereby members of the public, when donating to charities, know that they are donating to charities in that good faith. This amendment is to ensure that is the case. It is a sensible amendment.