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Charities have been issued with stern government guidance on the right way to take advantage of tax breaks.
The Charity Commission’s document explains that reasonable use of fiscal reliefs and tax planning is necessary and sensible, but urges trustees to have regard to their duty to act prudently in the best interests of their charity and not enter into arrangements that could damage the reputation of the organisation.
Charities have been issued with stern government guidance on the right way to take advantage of tax breaks.
The Charity Commission’s document explains that reasonable use of fiscal reliefs and tax planning is necessary and sensible, but urges trustees to have regard to their duty to act prudently in the best interests of their charity and not enter into arrangements that could damage the reputation of the organisation.
The guide explains the difference between evasion and avoidance, according to HMRC, and refers trustees to a Revenue policy document on the subject. www.lexisurl.com/hmrcrtea
It also gives examples of arrangements that have been considered to be avoidance in breach of trustees’ duties and responsibilities.
The Charity Commission warns it will assess all concerns about which it is made aware concerning tax fraud, evasion and avoidance by charities – and the body promises to use its power under the Charities Act 2011 to exchange information with the taxman in such cases.
