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As a charity or Community Amateur Sports Club (CASC), you may qualify for a number of tax exemptions and reliefs on your income, gains and profits. However, if you have any taxable income or gains that are not covered by a relief or exemption you must complete a tax return and send it to HM Revenue & Customs (HMRC). If you are asked by HMRC to make a return you must do so - even if you haven’t got any taxable income or gains. The type of tax return you must complete depends on how your charity is set up.
Charitable trusts are liable to pay Income Tax under Self Assessment, so if required will fill in a Trust and Estate tax return. All other charities and CASCs are treated as companies and may be liable for Corporation Tax, so will need to file a Company Tax Return and complete any appropriate supplementary pages.
This guide explains the type of tax return that's right for you, when you'll need to complete one, where to get the forms, and the deadlines for filing it.
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The type of tax return you will receive depends on whether your charity is set up as a trust or a charitable company. To find out how your charity is set up you look at your governing document.
Most charities are treated as companies for tax purposes as they were set up by:
Because they're treated as companies they are liable for Corporation Tax.
A charity is a trust if it was set up by a trust deed or will. Charitable trusts pay Income Tax and Capital Gains Tax under Self Assessment.
Some charities have to make a tax return every year but most only have to from time to time. If you are asked by HMRC to make a return you must do so.
Even if you’re not asked, you must make a tax return if your charity has:
You must tell HMRC when you:
HMRC will then usually send you a tax return so you can make a formal declaration of your charity's taxable income or non-charitable expenditure.
If your charity doesn't declare how much tax it owes correctly and on time, HMRC may charge a penalty.
Charitable trusts pay tax under Self Assessment. So as a trustee of your charitable trust you'll have to fill in a Trust and Estate tax return - form SA900.
You'll also need to fill in the supplementary page SA907 which asks you for details of:
You should also send in a copy of your accounts for the period covered by the tax return.
If you prefer, you can complete and file a Trust and Estate Return online using commercial software.
You can download the Trust and Estate Return form and the supplementary page SA907 from the HMRC website. There are also help notes for filling in the supplementary page.
CASCs, and charities that aren't trusts, are treated as companies for tax purposes. This means your CASC or charity may be liable for Corporation Tax and you'll need to file a Company Tax Return and supporting documents to account for any tax you owe.
You'll also have to complete the supplementary charities page which asks you for details of:
From 1 April 2011 onwards, HM Revenue & Customs (HMRC) will not accept paper Company Tax Returns for accounting periods ending after 31 March 2010. Charities and CASCs will have to submit their returns online and pay any Corporation Tax and related payments due electronically (for example by Direct Debit).
The rules on how you calculate the Corporation Tax you need to pay, or how to fill in the return itself, have not changed. Only the format of what you send and how you send it to HMRC.
Smaller charities - those with income that does not exceed £6.5 million for the accounting period - can find extra help on how to file company accounts online in the detailed guidance notes.
For accounting periods ended before 31 March 2010 you can download the Company Tax Return form and the supplementary page CT600E from the HMRC website. There are also help notes for filling in the supplementary page.
One of the main advantages of filing your tax returns online is that the software you use will automatically calculate any tax your charity has to pay.
Also, if your charity is a trust, the deadline for filing your Trust and Estate Return online is 31 January instead of 31 October for paper tax returns. This means you get an extra three months if you choose to file your Trust and Estate Return online.
If you want to file either a Trust and Estate Return or a Company Tax Return online, you'll need to register for HMRC Online Services. If you're filing the Trust and Estate Return and supplementary page online, you'll need to complete it using commercial software.
If you're filing a Company Tax Return and supplementary page online, you can either use:
If you send in a paper tax return, you can make sure HMRC processes it quickly by:
Filing your tax return online can help you to avoid making mistakes because many of the calculations are worked out for you.
If you're sent a notice to complete a tax return before or on 31 July for the last tax year and you want to file a paper tax return, you must send it back by 31 October.
If you're sent a notice to complete a tax return for the last year after 31 July or for an earlier year, you must send back the completed paper tax return within three months of the date the notice was issued.
If you file online, you're allowed extra time to complete your tax return. So when you're sent a notice to complete a tax return before or on 31 July for the last tax year, you've got until 31 January to file it online.
If you're sent the notice to complete a tax return after 31 July for the last tax year but on or before 31 October, the filing deadline is also 31 January. But if you're sent a notice to complete a tax return after 31 October, you must file your online tax return within three months of the date the notice was issued.
The filing date for Company Tax Returns is 12 months and one day after the end of your 'accounting period'. You don't get any extra time when you file your Company Tax Return online.
If your charity is sent a tax return you must complete it and send it back to HMRC within the time limits given on the forms. If you do not complete your tax return, or if you send it back late, normal penalty provisions will be applied.
You'll find details about late return penalties in the notes that accompany all tax returns.
You must pay the tax your charity owes on time. If you pay tax late, HMRC will charge you interest and you may also be charged a penalty.
For more help you can contact the Charities Helpline.