Policy paper

Charity tax reliefs: guidance on Charity Commission policy

Guidance to charity trustees on the use of tax reliefs available to charities in the management and administration of their charity.

Applies to England and Wales

Documents

Details

This document sets out the commission’s regulatory guidance to trustees on the use of fiscal reliefs available to charities, including participation by charities in tax avoidance arrangements.

It explains how:

  • reasonable and prudent use of fiscal reliefs and tax planning by charities is both necessary and sensible
  • in their use of fiscal reliefs, trustees must have regard to their duty to act prudently in the best interests of their charity and must not enter into any arrangements which can damage the reputation of the charity and may bring it into disrepute
  • charities must not engage in or be associated with tax evasion or tax fraud - this is illegal

Tax evasion, tax fraud and other abuses of the tax system, including the development or participation in tax avoidance arrangements, are primarily matters for HM Revenue & Customs (HMRC).

But the commission will have very serious regulatory concerns where trustees’ use of fiscal reliefs are in breach of their duty to act prudently and in the best interests of their charity and in accordance with their responsibilities as set out in this guidance.

Published 21 January 2015