Tax on charities

If you run a charity then you need to know your responsibilities regarding the payment of tax. This is where our charity tax experts can help you.

While there are a number of exemptions and reliefs available to charitable organisations, this does not mean that charities never pay tax.

In order to qualify for exemptions, your organisation must be recognised as a charity for UK tax purposes. This way, not only could it be eligible for exemptions and reliefs on income and gains, but also profits on some activities.

If your charity receives taxable income or gains, then you must inform HM Revenue & Customs and complete the appropriate tax return depending on whether your organisation is a charitable trust or a company.

There is also the issue of VAT to consider. VAT can affect charities in a variety of ways. These include:

  • Being liable to register for VAT if you provide goods or services for a charge, even if your activities are part of your charitable aims;
  • Being able to claim back some of the VAT you are charged by your suppliers if your charity is VAT registered;
  • Being entitled to VAT relief on some of the goods and services your charity buys, regardless of whether or not you are VAT registered.

Whether you are entitled to any relief will depend on the nature of your charity and its individual circumstances.

Milsted Langdon’s charity tax experts can advise you on whether your organisation is entitled to any exemptions or reliefs and, if so, how to take advantage of the opportunities available to you, such as changes in VAT legislation.

We understand that, as a charity, you want as much money as possible to go to those your organisation was set up to benefit, and not the taxman. We can advise you on your tax liabilities to ensure you are not paying too much or too little.

We can also help you apply for recognition from HMRC as a charity for tax purposes.

To find out how we can help you, please contact us.