Submission of Annual Accounts to Her Majesty's Revenue & Customs

Registered Charities with a S505 ICTA 1988 exemption in place do not need to send their accounts to the Inland Revenue each year. The FICO, a division of the Inland Revenue, retain the right to ask you to send in your accounts. In addition you must inform them if there is a substantial change in the nature of your income.

Voluntary organisations are unlikely to have S505 exemptions in place and would therefore fall in to the Pay and File regime, which requires the completion of a Corporation Tax return CT600, and submission of the accounts to the local tax office.

If an accountant or tax advisor assists you, remember to pass on the tax forms.

Gift Aid

Gift Aid is a means by which individuals or a company can give money to a charity and tax relief on the gift can be obtained.

• From April 1st, for companies and, April 6th 2000, for individuals, gifts of any size will be included.

• In time, deeds of covenant will be replaced.

• Individual donors/ givers will no longer have to give the charity a gift aid certificate. This will be replaced by a declaration and can be done over the phone or the Internet. The individual will still need to deduct basic rate tax from the gift as before (e.g. for the equivalent of £100 gift the giver only needs to send the charity £100 x 0.80 = £80.) The charity will reclaim the tax from the Revenue.

• Donors will no longer have to be basic rate taxpayers so long as they pay enough tax to equal the tax relief on the gift. The donor must be paying at least 28p tax on their income/gains for each £1 of the gift given.

• Individual donors will be able to claim higher rate tax relief against either income or capital gains taxes.

• Companies will be able to make their gift without deducting tax at basic rate or giving the charity a declaration or certificate. They will claim their tax relief when calculating profits.