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Charities can claim tax relief on income and gains as well as claiming tax back on income received on which tax has already been paid, for example on bank interest and Gift Aid donations.
Before you can take advantage of these tax reliefs and make tax repayment claims, your charity needs to be formally recognised by HM Revenue & Customs (HMRC) for tax purposes.
This guide explains how to apply to HMRC for recognition. The requirements vary according to where your charity is located.
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Your organisation must be recognised as a charity for tax purposes so that:
Your organisation can apply to HMRC for recognition as a charity for tax purposes. To do this you need to complete form ChA1.
Charity trustees and anyone involved in the day-to-day running of your organisation should also read the basic guidance on 'Fit and Proper Persons'. This guidance explains the need for charities to ensure that their managers are suitable to hold such posts and, in particular, that they haven't been involved in tax fraud or disqualified from being a charity trustee. It also includes a model declaration managers can sign.
You should send your application to HMRC Charities.
Once HMRC Charities recognises you as a charity for tax purposes, they'll set up a record so that any repayment claims you make can be processed. HMRC will give you a reference number to use on all claims and correspondence. You will only be able to claim relief from the date from which HMRC recognises your organisation became eligible to claim UK charity tax reliefs, subject to meeting any time limits for making a claim. This date is known as the effective date. HMRC Charities will tell you what this is when they send you the reference number.
For more help you can contact the Charities Helpline. Select option two for registering a charity for Gift Aid or charitable status.