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Charities tax compliance consultation

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Last week, on Tax Administration and Maintenance Day, the Government announced a suite of tax policy proposals that are aimed to simplify and modernise the tax system, tackle non-compliance and make the tax system fairer for taxpayers.

I was excited to learn that a charities tax compliance consultation had been launched as part of the proposals and was eager to understand what the proposals entailed, and whether there would be any simplification of the corporation tax requirements of charities. Unfortunately, that was not to be.

The consultation is aimed at tackling non-compliance in order to protect the integrity of the sector. For charities to benefit from tax relief, certain rules must be met. However, the Government has stated that some rules are not working as intended.

Views are sought on a number of areas including:

  • the tainted charity donations rules;
  • approved charitable investments and preventing abuse of the rules;
  • closing a gap in the non-charitable expenditure rules and the carry back provisions; and
  • withholding payments of Gift Aid and disapplying other tax reliefs from charities that have not met their tax filing and payment obligations.

The intention is that any changes would not detract from the overall generosity of the reliefs – and nor should they impact legitimate charities and transactions. It will be important for the sector to input into the consultation to ensure that this is the case.

More information about the consultation can be found here. The consultation will run until 20 July 2023 and responses should be sent to

In addition to this consultation, it was pleasing to see that the Government has confirmed that it will continue to engage with the sector on the future of Gift Aid. The aim being to improve the way that Gift Aid works to minimise administrative burdens through the use of digital technology.

For further information, please email me on or get in touch with your usual contact in the BHP Charities Team on 0333 123 1717.