Where the corporation tax liability of a club or an unincorporated organisation does not exceed £100, and where that club or organisation is run exclusively for the benefit of its members, HM Revenue and Customs (HMRC) will not generally require that club or organisation to complete corporation tax returns. HMRC review such treatment every 5 years. This treatment does not apply to companies which are wholly owned by, or subsidiaries of, charities.
HMRC recognises that asking a charity to formally 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.