The government is considering stopping Gift Aid payments and other tax reliefs from charities that are late with their reporting and filing obligations.

‘The intention is not to make all charities file returns annually nor be punitive to charities that meet their obligations, but instead to ensure tax returns are filed when they are required or requested,’ HMRC said in the consultation.

‘If the charity fails to file a tax return or returns when requested, HMRC could withhold claims to reliefs until they submit a return.’

HMRC acknowledged that ‘any change would need to be carefully targeted at cases where withholding was the appropriate response. We are also seeking views on how best to educate the sector ahead of commencement of any new rules’.

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