Charities - Returns

Most of the income received by charities is exempt from tax. Occasionally charities receive income that is not exempt or spend it in ways that is not charitable.

In these, and in some other circumstances, the charity may be liable to tax. When this happens the charity is treated in exactly the same way as any other taxpayer and must account for the tax due through the self-assessment system. This is done by completion of a Self-Assessment return.

Some charities will receive a tax return every year but most will only receive one occasionally. We issue returns to a selection of charities each year on a random basis. If you are asked to make a return, even if all of your income is exempt and you have applied the charity's income correctly, you must complete the return even if there is no tax to pay.

The subject of Self-Assessment returns often causes concern for charities but we have tried to make this as easy as possible by designing a special page for charities to complete. Invariably there will be very little on the main Self-Assessment return that the charity needs to complete.

To link directly to the charity pages for companies or trusts follow the links below.

Companies

• Main Returns - CT600 (PDF 122K)
• Charity pages - CT600E (including notes) (PDF 57K)

Trusts

• Main returns - SA900 (PDF 1537K)
• Charity pages - SA907 (PDF 102K)
• Notes on charity pages - SA907 notes (PDF 52K)

Frequently asked questions

Tax Returns

Does Self-Assessment apply to charities?

Yes, for trusts since 6 April 1996 and for other charities for accounting periods ending on or after 1 July 1999.

Do all charities receive returns each year?

Some charities will receive a return every year but most will will receive a return only occasionally. We select a sample of charities each year and send them a return.

Why should charities self assess when their income and gains are exempt?

Without a return we can't be certain all the income is exempt.

Must we complete a return if we receive one?

Yes, once you have been sent a tax return you must complete it in the same way as every other company or trust.

What should be shown on the return?

The main return is for non-exempt amounts only. But there are supplementary pages, which must be completed to claim exemption for the period in question.

How do we get the supplementary pages?

You can telephone the specialist order lines or download the pages from the earlier links.

Trusts - Orderline 0845 9000 404 ask for SA907

Companies - Orderline 0845 300 6555 ask for CT600E

If we receive a return when must it be sent back?

There are different rules depending on whether the charity is a trust or treated as a company for tax purposes.

For a trust the deadline is the later of : -

31 January following the tax year to which it relates;

or

three months from date of issue of the return.

For other charities the deadline is :-

the latest of the following dates:-

12 months after the return period;

12 months after the accounting date (when accounting date and return date don't match);

3 months after receipt of the notice to file.

What if we are late sending the return back?

You will be charged penalties.

What if we have taxable income or gains but haven't received a return?

You must tell us. Charities have the same obligations as any other taxpayer to notify HMRC of any liability they may have.

Do we still need to send you accounts every year?

No, not unless we have sent you a return to complete. The charity accounts should be sent back with the completed return and supplementary pages.

What happens if a return is received for the wrong accounting period?

If the charity is a trust, complete it for the tax year ended 5 April. If the charity is a company, change to the correct dates and complete it for that period.

How do we know if our charity is a trust or a company?

If your charity was set up by a Trust Deed, Will or Settlement then it's a Trust for tax purposes. All other charities are treated as companies for tax purposes.

Do we have to pay tax?

Most charities will not have to pay tax.

What if I get a payment demand?

If you are concerned that no tax is due please contact us to discuss the demand.

How does Self Assessment affect our claims?

We will usually continue to repay as normal even if a return has been issued. Further repayment can be claimed on the supplementary pages. However, we would prefer you to claim on the R68(2000) with supporting schedules.