Scientologists set to cash in on tax break

The Times, UK/June 23, 2007
By Dominic Kennedy

A change in the legal definition of religion has opened the way for Scientology to claim a multi-million-pound British tax break by registering as a charity.

Advisers believe the new law, which recognises groups that worship multiple gods, or none at all, entitles the movement to the same privileges as traditional faiths like Christianity.

Pagans, witches, Rastafarians, druids and satanists may also be entitled to start rattling collecting tins bearing the label "registered charity".

Scientology, founded by the science fiction writer L Ron Hubbard, has long craved charitable status in England but was turned down by the Charity Commission in 1999.

A vital sticking point was that religion was then defined as "worshipping a supreme being". The main activities of Scientology involve a type of one-to-one counselling known as "auditing", and "training", a practice that involves the study of Hubbard's works. Neither was considered by the commissioners to be worship. The commission noted that most followers paid for these services but accepted that organised donations were a feature of some established religions.

Scientology's main British body has an annual income of £10 million. If it becomes a charity, it can reclaim the basic tax rate on donations, boosting their value by 22 per cent.

The lawyer who finally won Scientology's 25-year battle for tax-free status in the United States told The Times she believed it was now entitled to be classed as a religion in Britain.

Monique Yingling, a lawyer from the Washington practice Zuckert, Scoutt & Rasenberger, said: "The Charity Commission found that the Church of Scientology was not a religion for charity purposes. At that time it required worship of an anthropomorphic god and a supreme being. Now the law has changed with the Charities Act 2006 and there is a new definition of religion. Religion now includes belief in a god, belief in many gods or belief in no god. It's pretty clear that the basis on which the Charity Commission decided before no longer applies."

The commissions said a consultation would begin this autumn to clarify the meaning of religion under the new law.

Scientology has already won a string of victories against British officialdom to gain tax-free or low-tax status. In 2000 it persuaded Revenue & Customs that it should be exempt from VAT on payments received because its services were educational and nonprofitable. In a test case before the VAT Tribunal, the Scientologists' lawyers forced the taxman to return £8 million overpaid VAT. Revenue & Customs said it was "currently considering its position".

Last November, when the faith opened a church near St Paul's Cathedral, it was granted mandatory rate relief by the Corporation of London because it was for "charitable purposes". The concession saves the sect £281,344 a year.

Scientology was back in the news last month when the BBC Panorama reporter John Sweeney admitted ranting, "like an exploding tomato", at sect chiefs disrupting his investigation. Ms Yingling said: "The biggest discrimination is that you are looked at as a second-class citizen because of the failure to recognise Scientology as a charity. They can call you names like 'nefarious cult', which you wouldn't do to the Church of England."

Bob Keenan, director of the L Ron Hubbard Foundation, said: "We encountered a lot of this in the recent BBC programme. That was almost their war cry."

In the stars

• Celebrity followers of Scientology include Tom Cruise, John Travolta, Priscilla Presley, Kirstie Alley, and the musicians Chaka Khan and Beck
• The richest known follower is James Packer, the Australian with a $5 billion media empire
• Travolta's film of L Ron Hubbard's science fiction romp Battlefield Earth was a box office disaster
• Scientologists turned the tables on Panorama by tracking the investigative reporter John Sweeney with video cameras and putting embarrassing footage on YouTube
• The German Government condemns Scientology as a commercial enterprise "aimed at abolishing the free democratic basic order"
• Police officers were given free tickets to the London premiere of Cruise's Mission Impossible 3

Source: Forbes; internet movie database; German Government; Times database