Mr. Niall Cody:

A total of 8,160 bodies or trusts hold the charitable tax exemption. Like every other sector, we make risk-based interventions having regard to risk that arises. We have a charity section which monitors and controls on an ongoing basis. We also engage with the Charities Regulator. With the nature of its business, there is not significant tax risk in the charity sector. Charities' incomes are not liable to income tax or corporation tax. They may have some VAT liabilities but generally it does not apply. The big issue is the payroll. Obviously, there are rules around employees and directorships and that is an area to which we pay close attention.

An interesting item from the budget speech that has not yet received any coverage - and this is relevant to PAYE, charities and all businesses - was the Minister's announcement of our engagement in a consultation process about the modernisation of the PAYE system and a move to real time. We have launched that. It was published on our website on Tuesday and we are going to engage with payroll businesses. The key issue there is it will give employees control over their tax affairs. Currently, no employees, be they charity employees, public servants or private sector business employees have control over their own tax details through the year. They are fully dependent on the employers and the end-of-year process. In a way, if a business is running into difficulty, the employees often are the last to know. They do not know the real-time situation, as it is not there to see. From this committee's point of view, and in improving the overall compliance, I believe that PAYE modernisation events over the next couple of years are very important.