Charity Tax Advice & Efficiencies: Charity Tax Law
At Lupton Fawcett, we have a unique understanding and approach when it comes to helping charities with their tax requirements. Our clients find this to be particularly useful as charity tax is a complicated topic as charities have a unique tax status compared to other kinds of organisations.
We are one of the few law firms in the Yorkshire region that specialises in this area. We collaborate with our dedicated Charities & Social Enterprises Group, which works closely with charitable and socially based enterprises and not-for-profit organisations across the region.
Our Corporate Tax and Finance Solicitors – based in Leeds, Sheffield and York – are here for you if you would like to discuss your charity’s tax reliefs, exemptions or responsibilities. Call 0333 323 5292 or complete the online enquiry form on this page.
About charity tax
Charities are entitled to relief from tax in certain situations, and to be entitled to these reliefs they must meet certain conditions. They must be:
- Established for charitable purposes only
- Run by fit and proper persons – charities must choose a maximum of two authorised officials to manage the charity’s tax, and responsible persons to be legally accountable for running the charity. All of these people must be proven, via the provision of a signed declaration to HM Revenue and Customs (HMRC), to be fit to run the charity
- Based in the UK, EU, Iceland, Liechtenstein or Norway
- Registered with the Charity Commission or other relevant regulator, if required to register
- Be recognised by HMRC and provided with a HMRC charity reference, which can be achieved by using the HMRC’s online service
Charities do not have to pay tax on:
- Profits made when selling or disposing of an asset
- Property purchases
- Rental or investment income
- Profits from trading
If you work for a community amateur sports club (CASC), you are entitled to slightly different tax reliefs, details of which can be found here.
Charities complete a tax return and pay tax on:
- Profits from developing land or property
- Dividends from UK companies before 6th April 2016
- Purchases, although there are different VAT rules for charities that need to be taken into account. More information can be found here
- Business rate (with an 80% discount) on non-domestic buildings
- Non-charitable expenditure
In addition, charities are entitled to claim back tax that has been deducted, for example on donations via Gift Aid or on bank interest.
Our expertise includes advising on:
- Gifts to charities
- The new social investment tax relief (for qualifying investments in charities and social enterprises)
- VAT issues in connection with charities and social enterprises purchasing and developing land such as:
- disapplication of option to tax
- potential for zero rating
- new developments and extensions
- group VAT registration
- VAT issues generally
- Availability of charitable reliefs and exemptions (from income tax, corporation tax, CGT and SDLT)
- Tax restructuring of activities
Our recent experience includes:
- Discussing VAT issues with seller in connection with a dis-application of the option to tax (where buyer was intending to convert building to Relevant Charitable Purpose (RCP) use)
- Advising on ability for a charity to structure activities using a group structure to maintain charitable exemptions for direct tax purposes and enable VAT registration and input VAT recovery for certain income streams
- Advising on zero rating for construction services and materials in relation to RCP and Relevant Residential Purpose (RRP) buildings
- Advising on the potential for zero rating for onward supply of an RRP building
- Advising on 10 year certificate for zero rated and reduced rate building works for RRP or RCP use and advice on change of use of certificated buildings
- Advising on potential to mitigate VAT on supplies of staff to exempt / non-business entities
- Advising a community amateur sports club in respect of potential tax liabilities in the context of a proposed disposal of property subject to a historic charitable trust
If you would like to speak to our solicitors about anything relating to charity tax, feel free to get in touch today.
Call 0333 323 5292 or complete the enquiry form on this page.
Lupton Fawcett are a leading personal and commercial law firm in Yorkshire with well-established offices of highly experienced solicitors in Leeds, Sheffield and York.
We have spent over one hundred years using our legal skills to help you through difficult, complicated or emotional times. Within every area of law, we put your interests first.
We provide a personalised service, with sector specialists and extensive resources to ensure we are giving you the best solutions to your problems.
Our Corporate Tax & Finance Solicitors act regularly for clients across the United Kingdom including Bradford, Birmingham, Hull, Leeds, Liverpool, London, Manchester, Sheffield, York and Nottingham. We also provide specialist niche legal and commercial services for Irish companies wishing to do business in the UK and legal advice for UK companies trading in the Republic of Ireland
As recognised experts in legal advice for charity and social enterprises we can support your needs wherever you live in England, Wales & Northern Ireland.
Call today or complete the enquiry form and we will get back in touch with you quickly. We will always respond promptly, and we will be happy to help.