Increased Scrutiny from HMRC on charity tax compliance

HMRC’s updated approach to charity tax compliance introduces a shift in emphasis from donor intent toward the outcomes and financial effects of transactions. This broadens the scope of eligible compliance investigations and requires charities to demonstrate clear governance, transparency, and consistency in financial decision-making. Areas such as legacies, investment arrangements, and donation structures will face heightened scrutiny. Organisations must therefore strengthen internal audit trails, ensure robust documentation, and regularly review financial policies to reflect best practice. Trustees should familiarise themselves with evolving tax guidance and consider obtaining specialist advice where needed. While the increased scrutiny may initially feel burdensome, it ultimately serves to protect both charities and donors by safeguarding the integrity of charitable funds and ensuring that tax reliefs are applied appropriately.

Find out more about the changes to charity compliance measures

If you have any questions, then please feel free to get in touch with Alan Rolfe on 023 8046 1235 or email Alan Rolfe.