In April, HMRC published a consultation on charity tax compliance to:
“examine … charity taxation rules to help tackle non-compliance and protect the integrity of the charity sector without changing the overall purpose of the reliefs … [and] … ensure the rules continue to be fit for purpose.”
In the consultation document, HMRC stated that it wanted to explore reasonable and proportionate changes where tax relief rules do not work as intended. It added that: “Any changes would not detract from the overall generosity of the reliefs or be intended to catch out legitimate charities.”
Working alongside ACEVO, CAF, CFG, CRA, CIOF and NCVO, SCVO has supported the Charity Tax Group in developing a response to the consultation, urging HMRC to exercise caution to avoid unintended consequences for the majority of law abiding charities, as well as a possible adverse risk to donor generosity brought about by tax uncertainty.
In our joint response:
The full text of our joint response addresses the issues raised by the consultation in some detail. HMRC has not, as yet, committed to any of its proposals. Discussion may therefore continue well beyond the consultation period and we therefore encourage charities to familiarise themselves with the issues involved.