In response to HMRC's consultation Charities tax compliance, the professional bodies urge HMRC to produce clear, comprehensive guidance on taxation for charities, while recommending caution around proposed reforms. As current guidance is piecemeal and lacks detail, CIOT suggest that improved HMRC guidance on tax for charities, with clear examples, would help explain how the often complex rules apply.
While the tainted donation rules (which prevent donors from receiving financial benefit from their donation) merit close review, particularly around the main purpose test, it also believes that the rules should be retained and refined rather than replaced. Withholding tax reliefs pending submission of a tax return seems 'excessive' given that the non-compliance could be unintentional.
The CIOT also highlights (at para 8.3) apparent anomalies between the tax treatment of charities and community amateur sports clubs, and in the application of relief for disposals of land by a donor.
In response to HMRC's consultation Charities tax compliance, the professional bodies urge HMRC to produce clear, comprehensive guidance on taxation for charities, while recommending caution around proposed reforms. As current guidance is piecemeal and lacks detail, CIOT suggest that improved HMRC guidance on tax for charities, with clear examples, would help explain how the often complex rules apply.
While the tainted donation rules (which prevent donors from receiving financial benefit from their donation) merit close review, particularly around the main purpose test, it also believes that the rules should be retained and refined rather than replaced. Withholding tax reliefs pending submission of a tax return seems 'excessive' given that the non-compliance could be unintentional.
The CIOT also highlights (at para 8.3) apparent anomalies between the tax treatment of charities and community amateur sports clubs, and in the application of relief for disposals of land by a donor.
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