Tax compliance for charities

Produced by Tolley in association with Speechly Bircham LLP

The following Trusts and Inheritance Tax guidance note Produced by Tolley in association with Speechly Bircham LLP provides comprehensive and up to date tax information covering:

  • Tax compliance for charities
  • Introduction to tax compliance
  • Type of Tax Return
  • Filing the Tax Return
  • Filing dates
  • Charitable trusts
  • All other charities
  • Penalties

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.

Type of Tax Return

A charitable trust is liable to pay income tax under the Self Assessment regime. If required, a charitable trust must fill in a Trust and Estate Tax Return (form SA900).

Any charity that is not a trust is treated

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