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Introduction to the tax treatment of a charity

Charities are not exempt from taxation, but they do benefit from a number of specific tax reliefs.

A charity does not need to be registered with the Charity Commission to qualify for tax relief. For example, if the charity is excepted, exempt or is too small to be registered, the charity will not lose its tax relief.

Strictly, a charity loses tax relief if it becomes subject to a requirement to register as a charity but registration does not occur (see FA 2010, Sch 6, Part 1, para 3). However, in practice a short delay in registering as a charity, once a requirement to register has arisen, is unlikely to prejudice the availability of tax reliefs.

Before a charity can take advantage of these tax reliefs and make tax repayment claims, it needs to be formally recognised by HMRC for tax purposes. If the organisation has already been registered as a charity by the Charity Commission, this will usually be accepted as sufficient