HMRC treats non-profit organisations and charities very differently to businesses, offering some unique tax breaks in the process. If a charity is recognised by the tax authority, it will benefit from certain tax reliefs as long as the funds raised are used for charitable purposes. With unique tax breaks come unique challenges, many of which have been exacerbated by the pandemic, especially in the case of smaller charities. The public’s generosity has been directed largely towards the UK’s major charities, including the NHS, leaving many others facing financial ruin.
Careful accounting for charities and non-profits is vital to make sure that reputation and support are maintained, income is maximised, no more tax is paid than necessary and to ensure compliance. This latest Active Practice Update details how HMRC treats charities and also provides advice about Gift Aid and Tax Relief on Gifts to Charity.
If you would like to discuss in more detail any of the issues raised with a member of our team, please call 01772 741200