Charities: detailed guidance notes on how the tax system operates
Find out how to register a charity for tax, your obligations, and any reliefs or exemptions available.
Documents
Details
This guidance is about the direct tax obligations of charities and the reliefs available to them. Where appropriate there’s also information about indirect tax (VAT) obligations and reliefs for charities.
The information gives charities access to the most up to date information available about their tax obligations and any reliefs available to them.
Last updated
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Guidance has been updated to explain that charities based in the EU, Iceland, Liechtenstein or Norway can no longer apply to get tax relief. If you got tax relief on or before 14 March 2023, you will continue to get it until April 2024.
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Section 3.4 of 'Chapter 3: Gift Aid' has been updated to clarify when donations may incur an administration fee and when these fees are treated as charitable expenditure. Some of the information in chapter 3.45 has been removed as it is currently out of date.
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Section 3.45.4 of 'Chapter 3: Gift Aid' has been updated, to clarify how a refund arrangement can be waived so Gift Aid can apply.
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The guidance on loan waivers and loan repayments has been updated to clarify the requirements for each to be considered a qualifying donation for Gift Aid relief. New sections have been inserted at 3.13.2, 3.13.3, 3.45.6 and 3.45.7. Amendments have also been made to 3.45.1, 3.45.3 and 3.45.4.
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Chapters 3.42.11 and 3.42.12 of Gift Aid guidance have been updated to explain how to use letter templates and to ask for them to be issued from the end of year 3.
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The sections about acknowledgements and naming rights in Chapter 3: Gift Aid, have been updated to clarify when the acknowledgement of an individual, or naming of a building after an individual or business, is considered to be a benefit or an advertisement. Information about help during the coronavirus (COVID-19) period has been removed.
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Chapter 3.45 has been added to clarify rules on claiming Gift Aid on waived refunds and loan repayments.
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This page has had updated information added to Chapter 2 and Annex ii.
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Changes have been made to chapters 3.18 to 3.25 of the Charities guidance notes to clarify when and how donor benefits should be treated and how they are valued for gift aid limits.
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The total income of the charity has been updated in annex iv section 15 of the guidance.
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The limits for the relevant value test in Chapter 3.21 have been updated. The examples of how the relevant value test works in section 3.21.6 have also been updated.
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Attachment - Annex iv: trading and business activities - sections 9 and 15 have been updated with the rates for 2019 effective from 6 April 2019.
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Section 3.25 has been updated with more information on split payments.
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Sections 3.6.6, 3.7.1 and 3.9.1 have been updated to include guidance about the General Data Protection Regulations.
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Chapter 3.5 has been updated about Scottish taxpayers.
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Chapter 6 has been updated with information about HMRC services.
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This guidance has been updated in Chapter 3: Gift Aid in section 3.37 Membership subscriptions.
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Chapter 3.21 has been updated to amend the benefit limits for donations.
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This guidance has had Annex IX added dealing with the new Donor Intermediary process.
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This guidance has been updated to reflect the rule changes for the Gift Aid Small Donations Scheme from 6 April 2017. Chapter 8: The Gift Aid Small Donations Scheme is now covered over 2 guides - before 6 April 2017 and from 6 April 2017.
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New section 3.44 on Digital/Social giving added to chapter 3.
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Rates, allowances and duties have been updated for the tax year 2016 to 2017.
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Guide updated with the new £8,000 limit effective from 6 April 2016.
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Attachment - Annex iv: trading and business activities - basic principles has been updated at sections 45 and 47 to detail impacts on direct taxation arrangements between charities and their trading subsidiary companies.
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BSI address has changed.
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Chapters 3.5 and 3.6 amended on the Chapter 3: Gift Aid page.
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Chapter 6: Claims and Returns, section 6.11.3 Getting further help has been amended.
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Section 3.10.3 has been updated.
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Amendments made to text in Chapter 3 Section 3.42.
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The following sections 3.6.2, 3.6.8 and 3.39.33 in the detail guidance have been amended.
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Updates to Chapter 7.7 Other ‘risks’ the auditor will be looking for.
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Updates to Annex vii: affordable home ownership - charitable status and tax
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Guidance updated to clarify recent changes on Partnership Gift Aid declarations apply to Limited Liability Partnerships.
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Amendments made to text in Chapter 3 Section 10.3.
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Updates have been made to Chapters 3.11 to 3.18 of 'Chapter 3: Gift Aid'.
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First published.
Update history
2024-03-27 08:15
Section 8.3 of Chapter 8: The Gift Aid Small Donations Scheme from 6 April 2017 has been updated to remove a reference to checking for multiple donations from the same person.
2024-03-11 12:33
Paragraph 3.13.2 has been updated to show where you can find information about restrictions on relief for loan waivers by corporate entities.
2024-02-29 14:57
Section 3.45 of Chapter 3 has been updated to provide examples of Gift Aid on waived funds and loan repayments for individuals and companies.
2024-01-05 13:48
Update to correct an error in section 22.2 of Chapter 3: Gift Aid. We have adjusted the figures used in our calculations to make sure the aggregate value test produces the same pass or fail outcomes as before.
2023-12-07 15:49
In Chapter 8: The Gift Aid Small Donations Scheme from 6 April 2017, section 8.1 has been updated to clarify that top-up payments on chip and pin donations can be claimed. Section 8.3 has been updated to explain that a Community Amateur Sports Club must keep records of chip and pin donations made through bank accounts and terminals for their claims.
2023-11-24 10:29
Sections 3.4.1 and 3.13.1 of Chapter 3 have been updated to explain that cryptoassets must be converted to money before donations are eligible for gift aid.
2023-10-19 13:58
A link to the driver expenses manual has been added to chapter 3, section 3.41.10.
2023-08-02 14:56
In section 4.7 of Annex iii, we have removed guidance about ‘Programme Related Investments’ and ‘Mixed Motive Investments’ and replaced with ‘Social Investments’. At section 4.13, the Ethical Investments section has been updated to confirm the Charity Commission no longer uses the terms Mixed Motive Investment and Programme Related Investment, but HMRC recognise charities may still use these terms.
2023-07-11 15:58
Chapter 3.13.2 has been updated to explain the waiving of a refund or loan repayment by an individual can be considered a donation if certain conditions are met.
2023-07-05 15:23
Chapter 3, Section 3.4.5 has been updated to make it clear that donations made by an individual waiving a refund or a loan repayment due from a charity, can be considered a donation of a sum of money where there is a clear agreement to cancel a loan or not accept a refund.
2023-04-17 15:47
In Chapter 8: The Gift Aid Small Donations Scheme before 6 April 2017, the amounts in example 2 at Chapter 8.19.9 have been changed for consistency.
2023-03-17 13:35
Guidance has been updated to explain that charities based in the EU, Iceland, Liechtenstein or Norway can no longer apply to get tax relief. If you got tax relief on or before 14 March 2023, you will continue to get it until April 2024.
2023-01-20 12:03
Section 3.4 of ‘Chapter 3: Gift Aid’ has been updated to clarify when donations may incur an administration fee and when these fees are treated as charitable expenditure. Some of the information in chapter 3.45 has been removed as it is currently out of date.
2022-11-18 14:05
Section 3.45.4 of ‘Chapter 3: Gift Aid’ has been updated, to clarify how a refund arrangement can be waived so Gift Aid can apply.
2022-10-19 14:26
The guidance on loan waivers and loan repayments has been updated to clarify the requirements for each to be considered a qualifying donation for Gift Aid relief. New sections have been inserted at 3.13.2, 3.13.3, 3.45.6 and 3.45.7. Amendments have also been made to 3.45.1, 3.45.3 and 3.45.4.
2022-10-13 12:42
Chapters 3.42.11 and 3.42.12 of Gift Aid guidance have been updated to explain how to use letter templates and to ask for them to be issued from the end of year 3.
2022-04-21 15:37
The sections about acknowledgements and naming rights in Chapter 3: Gift Aid, have been updated to clarify when the acknowledgement of an individual, or naming of a building after an individual or business, is considered to be a benefit or an advertisement. Information about help during the coronavirus (COVID-19) period has been removed.