Commentary

B5.871 Charity claims for exemption and for repayment of tax

Business tax
Business tax | Commentary

B5.871 Charity claims for exemption and for repayment of tax

Business tax | Commentary

B5.871 Charity claims for exemption and for repayment of tax

Claims for exemption under the charity provisions are to be made to HMRC1, see B5.803.

Claims for repayment of tax

If a charity makes a claim for exemption resulting in a repayment of income tax or the payment of a tax credit, HMRC may require it to produce for inspection books, documents and other records in its possession or under its control which contain information relating to the claim2. A charity which fails to comply with such a requirement is subject to a penalty for failure to provide information (see A6.340–A6.342).

Charities used to be able to make 'in-year' tax repayment claims under a concessionary treatment granted by HMRC, even though in law most trusts would be required to make the claim in a tax return only. FA 20103 introduced legislation to put this concessionary treatment on a statutory footing for gift aid claims (see E1.811), and FA 20124 did the same for other tax repayment claims made by charities.

HMRC have stopped making repayments of gift aid by payable order and instead they now make all payments electronically.

Online filing system from 22 April 2013

The 'Charities Online' service enables charities to make repayment claims online, and became available on 22 April 20135. Under the new system, the old R68(i) form was replaced by three options for making claims:

  1.  

    •     Claim using online form

  2.  

    •     Claim through charity's own database, or

  3.  

    •     Claim using a paper form

The first option is suitable for claims in

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