Charities escape quarterly online tax returns

10/02/2017

HM Revenue and Custom (HMRC) has confirmed that charities will be exempt from new digital filing requirements as a result of response to the Making Tax Digital consultation.

Last year HMRC conducted a consultation on Making Tax Digital. The consultation includes proposals that all organisations, including charities, maintain digital tax records.

As a result of petitions from The Charity Tax Group (CTG) and charity experts, the government has now confirmed that charities will be exempt from the new requirements. This means they will not have to file digital tax returns every quarter.  However, this exemption will not be extended to any trading subsidiaries of charities who will have to follow the new rules.

A significant reason for granting the exemption was that many charities do not currently have to submit tax returns, and benefit from various VAT reliefs.

The CTG welcomed this decision and will continue to lobby for trading subsidiaries to be added to the exemption.  If it is unable to obtain an exemption, the CTG hope to gain agreement for a transitional period and a size threshold to exempt smaller subsidiaries.

For more information on charity filing requirements please contact Elizabeth Irvine.