The June 2023 edition includes guidance on various points, including the following. 

Restriction of tax reliefs 

The newsletter reminds readers that, with effect from 15 March 2023, tax reliefs and exemptions will be restricted to UK charities only. Any non-UK charities registered with HMRC before that date will be able to claim reliefs until 5 April 2024. 

Charity compliance consultation 

A consultation is currently open to look at ways in which non-compliance with tax requirements can be reduced in the charitable sector. These include: 

• reviewing the rules around preventing donors and connected persons from obtaining a financial benefit from their donation;
• reviewing the rules covering prevention of abuse of the charitable investment rules;
• closing a gap in non-charitable investment rules;
• the possibility of sanctioning charities that do not meet their filing and payment obligations. 

Future of Gift Aid 

HMRC is considering both the viability and desirability of new systems, and better use of technology and online services, to improve administration of the gift aid system. HMRC is asking for volunteers to share their experience of using the system, from charities that claim gift aid through a variety of methods to those who don’t claim it at all. 

Changes in status 

A charity moving from unincorporated to incorporated status will become a new legal entity and must therefore make a new application for HMRC recognition. 

Overpaid gift aid 

When making an adjustment to a gift aid claim to reflect, for example, a donation that no longer qualifies for gift aid, it is the amount of the tax adjustment, not the amount of the donation, that needs to be included in the adjustment box. For example, if a donation of £20 no longer qualifies, the tax adjustment to be entered in the box is £5. 

More reading: 

• Restriction of charitable reliefs to UK charities
• Charities tax compliance consultation document