Guidance

Newsletter 2 — March 2026

Published 26 March 2026

Closure of the service to file company accounts and tax return

The online filing service used to file company accounts and tax returns closes on 31 March 2026. From 1 April 2026 organisations will need to use commercial software to file annual accounts and Company Tax Returns with HMRC. Other options are available for filing Companies House accounts

Why the service is closing

The service to support small, unrepresented organisations with simple tax affairs to file online does not meet modern digital standards, or recent changes to UK law under the Economic Crime and Corporate Transparency Act 2023. Since online filing for Corporation Tax was introduced in 2011, the market has matured and grown. Commercial products can offer much more than the current service, such as improved validation, tax support and reminders.

What this means for charities

Charities are generally exempt from paying Corporation Tax, but they are required to complete and submit a Company Tax Return in two specific circumstances:

• if they have income that does not qualify for tax relief
• if HMRC asks them to submit a return, even if they have no tax to pay

If you are required to submit a Company Tax return from 1 April 2026, you can no longer use the online filing service provided by HMRC and must use commercial software.

HMRC publishes a list of commercial software suppliers that can produce one or more elements of a Company Tax return. HMRC accepts returns filed using any of the suppliers listed.

A paper Company Tax return may only be submitted where a customer has a reasonable excuse or chooses to file in Welsh. In all other cases, organisations must file online.

You can find further information about the closure of the service and what to do now in our guidance on filing company accounts and tax returns if you previously used the HMRC online service

Charity and Community Amateur Sports Club (CASC) compliance — changes to charity and CASC tax relief rules

From April 2026, the government will introduce changes to the rules on tainted donations, approved charitable investments, and attributable income. These changes will affect all UK charities, Community Amateur Sports Clubs (CASCs), donors, and the agents and intermediaries who support them. The changes are designed to simplify existing rules and reduce the risk of charitable tax reliefs being misused.

Changes to the tainted donations rules

A donor should not receive any financial benefit from making a donation to a charity or CASC. From April 2026, the tainted donations rules will move from a test based on the donor’s motivation to a test based on the outcome, focussing on whether the donor receives any financial benefit, directly or indirectly, from making a donation to a charity or CASC. As part of this change, the test of ‘financial advantage’ will change to ‘financial assistance’, lowering the threshold for determining whether a donation is tainted.

Changes to approved charitable investments

There are 12 types of investment that qualify for charitable tax relief. Under the new rules, all 12 will need to meet a single condition — the charity or CASC must make the investment for its own benefit, and not for the purpose of enabling tax avoidance by any party. This change simplifies inconsistencies across the existing rules and helps prevent the misuse of charitable investment reliefs.

Changes to attributable income

From April 2026, the definition of attributable income will include legacies. As legacies may already have benefited from Inheritance Tax relief, charities and CASCs must ensure that legacy funds are used for charitable purposes to avoid a tax charge. This aligns the treatment of legacies with existing treatment of residual estate income and ensures charities direct legacy funds to their charitable purposes.

This change does not impose a deadline for spending legacy funds. The change brings legacies into the attributable income rules so that tax-relieved income must be used for charitable purposes. Charities will not be required to spend legacy funds within a set timeframe.

What charities and CASCs should do

To prepare for these changes, charities and CASCs should:

• review donation structures and investment arrangements to ensure they meet the new rules
• identify, monitor and record legacy income and ensure that legacy funds are used for charitable purposes
• watch for further guidance to be published in April 2026

Further information

Read more information on changes to charity compliance in:

• the measure ’Changes to the charity compliance measures’
• the consultation ’Charities tax compliance — summary of responses’

Gift Aid — membership subscriptions

Membership subscriptions paid to a charity which offer access to facilities and services in return are not considered gifts for Gift Aid purposes. Gift Aid can only be claimed on the basic element of the subscription that confers membership rights such as voting rights and the right to attend the charity’s Annual General Meeting (AGM).

We have updated our Gift Aid guidance at Chapter 3.37 to clarify that charities must clearly advertise the split between the basic element of the subscription and any additional charges for facilities or services before any membership is subscribed to. If a charity provides this breakdown retrospectively, the full membership subscription does not qualify for Gift Aid relief.

We have included two examples within Chapter 3.37 to explain how this works in practice.

Please read 3.37 Membership subscriptions for more information.

Retail Gift Aid — end of year letters

Charity shops that sell donated goods may need to write to their donors at the end of the tax year to inform them of the net proceeds raised from the sale of their donated goods. This applies where the proceeds raised are more than £20 in a single tax year, or every three years, whichever comes first.

We have listened to feedback from the sector and acknowledge that some charities may wish to use their own letters rather than the templates published by HMRC. We have therefore updated Chapter 3.42.15 to set out the compulsory wording that charities must include in any end of year letters.

Read Chapter 3.42 Claiming Gift Aid when goods are sold by, and the proceeds gifted to charities for more information.

Enhancements to the Claim Gift Aid Online service

We are currently undertaking work to improve the process for charities and CASCs to claim Gift Aid and tax back on other income. The improvements break down complex tasks into single-purpose screens with clear, structured content which provides a simplified claim process. We envisage this work to be completed over the next couple of months, and we will communicate more once the work has been completed.