Taxation: Charities

Treasury written question – answered on 25th February 2014.

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Photo of Nick de Bois Nick de Bois Conservative, Enfield North

To ask the Chancellor of the Exchequer

(1) how many charities using the online portal have been fined for late return of an annual return in each year since 2010;

(2) what the average cost has been to charities appealing against late filing penalties of the online annual return in each year since 2010.

Photo of David Gauke David Gauke The Exchequer Secretary

HM Revenue and Customs (HMRC) recognises that asking a charity to claim tax relief every year would be administratively burdensome and therefore they do not require every charity to file a tax return every year.

However, they do require every charity to file a tax return once every few years so that they can check that the charity is claiming any tax exemptions and reliefs in accordance with the law. In addition, charities have an obligation to complete a tax return where they have reason to believe that they should be paying tax on some of their income or gains.

If HMRC send a notice to a charity to file a tax return the charity must complete it and submit it within the time limits given on the forms or they may face a penalty.

HMRC have issued charities with penalties for late submission of their company tax returns in each of the financial years since 2008 as follows:

2008-09 1,418
2009-10 1,437
2010-11 1,312
2011-12 1,438
2012-13 1,723

This includes penalties issued on paper returns. From 1 April 2011, nearly all company tax returns for periods ending after 31 March 2010 have to be delivered to HMRC online.

HMRC does not collect data on the cost to charities of appealing these penalties.

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