It’s a common misconception that charities aren’t subject to tax when in fact one of the most complex areas for a charity to manage is 
applying for tax reliefs and application of VAT regulations.
This update to the guidance introduces a new section on Gift Aid donor intermediaries, which explains how the Gift Aid declaration ‘authorisation’ process works. HMRC has developed a new process to facilitate the making of gift aid donations through digital channels, online platforms and SMS text messaging. The authorisation process will enable donors to authorise a donor intermediary to create a gift aid declaration on the donor’s behalf which will apply in respect of that donor’s gifts for the rest of the tax year.
One of the other challenging areas of tax for not-for-profits is VAT as the rules are notoriously complex. As there are very few specific VAT reliefs for charities, it’s important that organisations ensure that all of the available reliefs are exploited.
We have extensive experience dealing with organisations in receipt of grant income and how this affects their VAT position. We can advise on the treatment of business/non-business income and the corresponding VAT reporting requirements. Take a look at how we work with charities and not-for-profits here.
