3,000 Charities To File A Tax Return With HMRC

In February 2019, HMRC officials announced at the Charity Tax Forum that 3,000 charities would be asked to file a tax return this year as part of a compliance review.

As charities don’t always submit tax returns, it’s likely that many of the 3,000 charities affected will either be filing for the first time or refamiliarising themselves with the tax return submission process.

Which charities are impacted?

The 3,000 charities that have been notified to file a tax return are those charities with the biggest Gift Aid claims. Gift Aid, according to HMRC’s website, allows a charity or community amateur sports club (CASC) to “claim back 25p every time an individual donates £1 […]”.

In addition, HMRC also announced that it planned to send requests to file a tax return to a random sample of CASCs.

If your charity is required to file a tax return, it is likely that you have already received correspondence from HMRC, but if you are in any doubt at all as to your filing obligations, it is best to speak with your tax advisor or directly to HMRC.

How do I file a charity tax return?

Typically, a charity files a tax return if it receives income that is not eligible for tax relief. As charities generally don’t pay tax on most revenue and gains if those amounts are used for charitable purposes, this means that many charities don’t file a tax return unless requested to by HMRC.

If a return is required, then the type of tax return required is dependent on the charity’s structure:

  • If a charity is structured as a limited company unincorporated association, a corporation tax return should be filed. A CT600E (the supplementary pages for charities and CASCs) should also be submitted as part of the return.
  • If a charity is structured as a trust, then a trust and estate self-assessment tax return is required.

It’s worth noting that the filing deadlines for corporation tax returns and self-assessment tax returns differ.

Corporation tax returns should generally be filed within 12 months after the accounting period end. On the other hand, self-assessment tax returns should generally be filed by 31 October following the tax year end (if submitting by paper) or by 31 January following the tax year end (if submitting electronically).

DataTracks has over a decade of experience helping entities file their tax returns with HMRC. To find out more about how DataTracks can help you file a charity tax return, call us on 020 3608 8035 or send us an email at enquiry@datatracks.co.uk.