CRS & AEOI Charity Update: Key Actions Before 31 May 2025

With the 31 May AEOI reporting deadline approaching, now is a good opportunity for charities to review whether they have any reporting or registration obligations under the Common Reporting Standard (CRS). 

For many charities, CRS is unlikely to apply. Recent changes also mean that some charities which were previously required to report may now fall outside the reporting regime entirely. 

However, for charities that receive a significant proportion of their income from financial investments, now is a good opportunity to consider whether these rules are still relevant. 

This blog explains what has changed and what action (if any) your charity may need to take. 

What is AEOI and CRS, and why does it matter to charities?  

The Automatic Exchange of Information (AEOI) is an international framework under which HMRC shares financial information with tax authorities in other countries. The aim is to combat cross-border tax evasion and protect the integrity of tax systems. 

Under these rules, organisations classified as Financial Institutions must: 

• carry out checks on beneficiaries or account holders; and 

• report certain overseas connections to HMRC annually 

While typically associated with banks, the definition of a “Financial Institution” is broad and can include some charities, particularly those with significant investment activity. 

The Common Reporting Standard (CRS) is the global set of rules that underpins AEOI. It requires Financial Institutions to identify and report information on individuals or entities who are tax residents outside the UK, enabling HMRC to exchange this information with overseas tax authorities. 

This Standard has been in place since 2017 and applies to entities that are deemed to be Financial Institutions, and broadly applies where: 

• A charity’s investments are managed by a professional investment manager, and 

• Over 50% of the charity’s gross income is derived from its financial investments over a three-year period (or the charity’s existence if shorter)

Examples of charities that may be caught by CRS include endowed charities, grant-making trusts, or charities holding significant investment portfolios managed on a discretionary basis (for example, by an investment manager or wealth manager). 

New exemption for many charities: Qualified Non-Profit Entity (‘QNPE’ status) 

From 1 January 2026, many charities may now be able to qualify as a QNPE, which provided all the conditions below are met, means the charity will be treated as a non-reporting Financial Institution. As a result, it will no longer be required to submit AEOI returns and may be able to deregister from HMRC’s AEOI service: 

• is established and operated exclusively for charitable or similar not-for-profit purposes – types of organisations that are exempt are included in the CRS manuals; 

• is exempt from UK tax; 

• has no shareholders or individuals with a beneficial interest in its income or assets; 

• does not distribute profits to private individuals or a non-charitable entity;  

• is required to pass its assets to another charity or a Government entity on winding up; and  

• Is registered as a charity with a UK charity regulator or be recognised as a charity or community amateur sports club for tax purposes with HMRC 

These conditions should be reviewed carefully to ensure a charity meets all of them.   

Charities that don’t meet the QNPE criteria will remain classed as Financial Institutions and will continue to be required to undertake due diligence checks on their beneficiaries to confirm tax residence and obtain further information (for example, address, country of residence and a Tax Identification Number where the beneficiary is outside the UK).  

Where payments are made to beneficiaries and account holders who are tax residents outside of the UK, these may need to be reported to HMRC on an AEOI return, which is required to be submitted to HMRC by 31 May following the end of the calendar year the payment relates to. 

Registration requirement for HMRC’s AEOI service 

In late 2025, HMRC announced a requirement for Financial Institutions to register with HMRC’s AEOI service, even where a charity that is classed as a Financial Institution has nothing to report. 

This is separate from the reporting requirement, the deadline for which was 31 December 2025, or later if the charity comes into scope after that date. 

As you can imagine, the tight deadline caught many by surprise, but HMRC has confirmed that “any such non-profit organisation that has not registered with HMRC’s AEOI service because it has never had Reportable Accounts is not required to register by 31 December 20251”. 

Summary 

While the AEOI rules remain complex, the introduction of the QNPE exemption means many charities will now have no reporting obligations – but it is important to review your position before the 31 May return deadline to ensure compliance. 

If you are unsure whether your charity meets the QNPE definition or is required to report/register for the new AEOI service, please contact our charity tax specialists here.