Tax compliance for charities

Produced by Tolley in association with Speechly Bircham LLP
Trusts and Inheritance Tax
Guidance

Tax compliance for charities

Produced by Tolley in association with Speechly Bircham LLP
Trusts and Inheritance Tax
Guidance
imgtext

Introduction to tax compliance

Charities are not exempt from taxation but they do have the benefit of a number of tax exemptions (subject to complex anti-avoidance provisions). Well-run charities usually do not suffer any direct taxation.

A charity must complete and submit Tax Returns in three specific circumstances:

  1. if served with a notice requiring it to file a Return

  2. if it has taxable income, gains or profits not covered by a relief or tax exemption, for example income generated from trading that is not within the charitable trading exemption (see the Tax treatment of the charity guidance note)

  3. if it has used income or gains for non-charitable purposes or non-qualifying investments

The type of Tax Return required depends on the way the charity is set up.

If a charity does not declare how much tax it owes correctly and on time, HMRC may charge a penalty.

HMRC have begun to periodically publish a Charities Newsletter which includes topical issues relating to charities, taxation and a Community Amateur

Continue reading the full document
To gain access to additional expert tax guidance, workflow tools, generative tax AI, and tax research, register for a free trial of Tolley+™
Powered by Tolley+
  • 18 Jul 2023 07:10

Popular Articles

Special rate pool and long life assets

Special rate pool and long life assetsSpecial rate poolExpenditure on some types of plant or machinery must, if neither annual investment allowance (AIA) nor first year allowances (FYAs) are available, be allocated to a ‘special rate pool’. Expenditure to be allocated to the special rate pool

14 Jul 2020 13:41 | Produced by Tolley Read more Read more

Married couple’s allowance

Married couple’s allowanceThe married couple’s allowance (MCA) is only available if one of the two spouses or civil partners was born before 6 April 1935. This means that one member of the couple must be at least 89 years old on 5 April 2024 to qualify for an allowance in the 2023/24 tax year.There

14 Jul 2020 12:13 | Produced by Tolley Read more Read more

Interest on late paid tax

Interest on late paid taxIntroductionInterest on late paid tax is a compulsory charge set out in legislation to reflect the interest which would have accrued to the Exchequer had the correct amount of tax been paid at the right time.Harmonised legislation was introduced in 2009 to:•set statutory

14 Jul 2020 12:00 | Produced by Tolley in association with Philip Rutherford Read more Read more