Written by Oroni Chowdhury · Last reviewed: November 2026 · Applies to the 2026/27 tax year
New trustees and treasurers often find HMRC the most confusing part of running a charity. The regulator, the bank and the donors all want something different, and HMRC letters rarely explain how the pieces fit together.
This guide sets out how HMRC and charities deal with each other in 2026/27. It covers recognition, the reliefs that follow, Gift Aid claims through Charities Online, when a tax return is needed, the rules that changed in April 2026 and the records HMRC may ask to see.
- Registering with a charity regulator does not register you with HMRC. They are separate steps.
- HMRC recognition is what unlocks tax relief and Gift Aid.
- Gift Aid adds 25p to every £1 donated by a UK taxpayer, claimed through Charities Online.
- Most small charities only file a tax return when HMRC sends a notice.
- New tainted donation, investment and legacy rules apply from April 2026.
- Keep Gift Aid declarations for 6 years after the last donation claimed.
How HMRC and Charities Work Together
Two different bodies look after a charity. The regulator decides whether an organisation is a charity in law and keeps the public register. HMRC decides whether that charity can have tax relief, and it handles every Gift Aid claim.
Which regulator you deal with depends on where the charity is based.
| Body | Covers | What it does for you |
|---|---|---|
| Charity Commission | England and Wales | Registers charities with income over £5,000 (and every CIO); receives annual returns |
| OSCR | Scotland | Keeps the Scottish Charity Register |
| Charity Commission for Northern Ireland | Northern Ireland | Registers and regulates Northern Ireland charities |
| HMRC | The whole UK | Recognises charities for tax, pays Gift Aid claims, checks compliance |
A regulator number is not HMRC recognition
This is the most common gap we see between HMRC and charities. A charity registers with the Charity Commission, starts collecting donations and assumes Gift Aid will follow. It won’t. Until HMRC recognises the charity, it has no HMRC charities reference and cannot claim anything back. Gift Aid also can’t be claimed on donations received before recognition.
Which Tax Reliefs Does a Recognised Charity Get?
Recognition is what makes the tax side of HMRC and charities work. Once recognised, a charity generally pays no tax on income or gains it spends on its charitable purposes (charities and tax). The key word is “spends”. Money used for anything else can lose its relief.
| Income | Usually relieved? | Condition |
|---|---|---|
| Donations | Yes | Spent on charitable purposes |
| Trading that is part of the charity’s purpose | Yes | Primary-purpose trading, such as a school’s fees |
| Other small-scale trading | Yes, within limits | Up to 25% of income, at least £8,000 and no more than £80,000 |
| Rent, interest and dividends | Yes | Spent charitably |
| Gains on selling assets | Yes | Spent charitably |
What charities still pay
Recognition is not a full exemption. Charities pay VAT on most of what they buy, around 20% of their business rates after mandatory relief, PAYE and National Insurance for staff, and tax on any non-charitable spending. Our sister firm sets out each one in its guide on which taxes charities still pay.
How to Register Your Charity With HMRC
Recognition is the first formal link between HMRC and charities, and it is done online through GOV.UK (get recognition from HMRC). Before you start, register with your regulator if you need to, as HMRC will ask for that number.
- Register with the Charity Commission, OSCR or CCNI, if your charity must.
- Collect the documents listed below.
- Sign in and complete the HMRC registration online. You can save and return to it.
- Make sure every official named is a “fit and proper person” to manage the charity.
- Wait for HMRC’s decision and your HMRC charities reference.
- Use that reference to set up Charities Online for Gift Aid claims.
- Bank account details and the charity’s financial accounts
- Names, dates of birth and National Insurance numbers of the officials
- Your regulator registration number, if you have one
- Your charitable objectives (purposes)
- Your governing document, which explains how the charity is run
Changing details after recognition
When trustees, the bank account or an authorised official change, tell HMRC using form ChV1. Out-of-date details are a common reason for claims being delayed, and the person who signs claims must be someone HMRC has on record.
Who can claim for the charity
A treasurer can make claims directly, or the charity can authorise an agent, such as an accountant, or a nominee to claim on its behalf. The charity completes a ChV1 to authorise them, and the agent then needs their own HMRC Online Services access. Whoever claims, the charity stays responsible for the declarations behind each claim.
Claiming Gift Aid Through Charities Online
Gift Aid is where HMRC and charities deal with each other most often, so it pays to get the routine right.
Gift Aid lets a recognised charity claim 25p for every £1 given by a UK taxpayer. Claims go through Charities Online, HMRC’s service for charities, community amateur sports clubs and their agents (claim tax back using Charities Online).
- Register for HMRC Online Services and request an activation code. It takes about a week to arrive and must be used within 28 days.
- Each online claim form takes up to 1,000 donations. There is no limit on how many claims you make.
- Donations of £20 or less can be grouped together, up to £1,000 per line.
- Claims are normally paid within 20 working days.
HMRC brought in a simpler online claims process at the start of September 2026. The claim rules themselves did not change (HMRC charities newsletter, September 2026).
What a Gift Aid declaration must include
Every claim needs a valid declaration from the donor (claiming Gift Aid). It must show the donor’s full name and home address with postcode, your charity’s name, a description of the gift, and a statement that the donor has paid enough Income Tax or Capital Gains Tax to cover the Gift Aid. Claims must be made within 4 years of the end of the period the donation was received in.
The Gift Aid Small Donations Scheme
The scheme lets you claim a 25% top-up on cash or contactless donations of £30 or less where no declaration is possible, such as collection tins.
You can claim on up to £8,000 of small donations a year, so a top-up of up to £2,000 (Gift Aid Small Donations Scheme). You must also have made a Gift Aid claim in the same tax year, and the small donations claimed cannot be more than 10 times your Gift Aid donations.
A recognised village hall charity receives £6,000 of donations with valid Gift Aid declarations. It also collects £1,500 in cash donations of £30 or less at events.
- Gift Aid claim: £6,000 × 25% = £1,500.
- Small donations top-up: £1,500 × 25% = £375 (well within the £8,000 cap and the 10 times rule).
- Total claimed from HMRC: £1,875, normally paid within 20 working days of each claim.
Do Charities Need to File a Tax Return?
A common question about HMRC and charities is whether a return is needed every year. Usually it isn’t: most small charities never file a tax return unless HMRC asks. A return is needed when the charity has income that does not qualify for relief, or when HMRC sends a notice to file, even if no tax is due (paying tax as a charity).
| Charity structure | Return HMRC asks for |
|---|---|
| Charitable company or CIO | Company Tax Return (CT600) with the charity supplementary pages |
| Unincorporated association | Company Tax Return (CT600) with the charity supplementary pages |
| Charitable trust | Trust and Estate Self Assessment return |
Ignore a notice and penalties follow, starting at £100 for a late Company Tax Return. HMRC can also refuse or reduce Gift Aid while returns are outstanding. If a notice arrives, check the deadline on it straight away.
Separately, the regulator has its own annual return. A charity with income over £10,000 files one with the Charity Commission, and charitable companies also send accounts to Companies House. These are not HMRC filings, but trustees often handle them together. If the charity is VAT-registered, our guide to paying HMRC VAT explains how payments reach the right account.
HMRC and Charities: The Rules That Changed in April 2026
The biggest recent change between HMRC and charities is a set of anti-abuse rules. Three measures took effect for transactions on or after 6 April 2026 (Income Tax) and 1 April 2026 (Corporation Tax). A fourth, on sanctions, is still to come (changes to the charity compliance measures).
| Rule | What changed | What trustees should do |
|---|---|---|
| Tainted donations | HMRC now looks at whether a donation gives the donor or someone linked to them “financial assistance”, judged by the outcome rather than the donor’s motives | Check any large gift that comes with a deal, loan or purchase attached |
| Approved charitable investments | All 12 approved investment types must now be made for the charity’s benefit, not to avoid tax | Record why each investment benefits the charity |
| Attributable income (legacies) | Legacies not spent on charitable purposes can become taxable | Track how legacy money is used |
| Sanctions | Stronger HMRC powers over trustees and managers who ignore tax obligations | Keep filings and claims up to date |
VAT is a separate relationship
Recognition for income tax does not change how VAT works. A charity whose taxable sales pass the £90,000 registration threshold must register for VAT like any business, and only a VAT-registered charity can reclaim VAT on its costs. Some purchases qualify for VAT reliefs, but the supplier usually needs a written declaration from the charity before applying them.
HMRC Compliance Checks and Record Keeping
For HMRC and charities alike, a compliance check is mainly a test of paperwork. HMRC checks Gift Aid claims regularly, and most checks are about records rather than wrongdoing. An officer will want to trace a sample of claimed donations back to a declaration and a bank record.
- Keep Gift Aid declarations for 6 years after the most recent donation claimed on them.
- Keep donation records for at least 2 years after each claim.
- For small donations, record the amount collected, the date and the date it was banked. Keep card machine receipts for contactless donations.
- Keep sponsorship forms. A single sponsorship donation over £500 must be listed separately with the donor’s name and address.
HMRC is reviewing its guidance on charity audits, so expect updates to the charities detailed guidance notes. The charities helpline may also ask extra identity questions before discussing your charity.
Trustee Checklist for 2026/27
Use this list once a year, or whenever trustees change, so the paperwork between HMRC and charities you look after stays in order.
- Confirm the charity is recognised by HMRC and note its charities reference.
- Check HMRC holds the right officials and bank details. Send a ChV1 for any change.
- Make Gift Aid claims regularly, well within the 4-year limit.
- Claim the small donations top-up if you collect cash or contactless gifts of £30 or less.
- Review any large or conditional gifts against the tainted donation rules.
- Record why each investment benefits the charity.
- Respond to any HMRC notice to file before its deadline.
- File the regulator’s annual return and, for companies, accounts at Companies House.
Mistakes to Avoid
| Mistake | What happens | How to avoid it |
|---|---|---|
| Assuming regulator registration means HMRC recognition | No Gift Aid can be claimed | Apply to HMRC separately |
| Claiming without a valid declaration | HMRC claws back the Gift Aid | Check every declaration has the required details |
| Claiming on payments for goods, raffle tickets or event entry | Claims are invalid | Only claim on genuine gifts |
| Not updating officials with a ChV1 | Claims delayed or rejected | Update HMRC whenever trustees change |
| Ignoring a notice to file | Penalties and withheld Gift Aid | Diary the deadline and file on time |
| Accepting a gift that benefits the donor | Relief withdrawn on that gift | Review conditions and take advice |
HMRC and Charities: FAQs
How do I register a charity with HMRC?
Apply online through GOV.UK for recognition. You need your bank and accounts details, the officials’ dates of birth and National Insurance numbers, your regulator number if you have one, your objectives and your governing document.
What is an HMRC charities reference?
It is the reference HMRC gives a charity once it has been recognised for tax purposes. You need it to set up Charities Online and to claim Gift Aid.
How long does a Gift Aid claim take to be paid?
HMRC normally pays Charities Online claims within 20 working days of receiving them.
Do charities have to file a tax return?
Only if HMRC sends a notice or the charity has income that does not qualify for relief. Companies and associations use a CT600 with charity pages; trusts use the Trust and Estate return.
Does a small charity need HMRC recognition?
Only if it wants tax relief or to claim Gift Aid. A small charity below the £5,000 Charity Commission threshold can still apply to HMRC.
Can HMRC refuse to recognise a charity?
Yes. HMRC can refuse if the organisation’s purposes are not exclusively charitable, its officials are not fit and proper persons, or the information supplied is incomplete.
How do I contact HMRC about a charity?
Call the HMRC charities helpline on 0300 123 1073, Monday to Friday, 8:30am to 5pm. Have your HMRC charities reference ready.
What is a tainted donation?
A donation linked to an arrangement that gives the donor, or someone connected to them, financial assistance. From April 2026 HMRC judges this by the outcome, and relief on the gift can be withdrawn.
Final Verdict: Getting HMRC and Charities Paperwork Right
The relationship between HMRC and charities rests on recognition. Get the charity recognised, keep its details current, claim Gift Aid with proper declarations, and answer any notice to file. From April 2026, trustees also need to look harder at large gifts, investments and how legacy money is spent. Do those things consistently and HMRC checks become routine rather than stressful.
- Check that your charity has an HMRC charities reference, not just a regulator number.
- Make sure your details with HMRC are current, and send a ChV1 if not.
- Review your Gift Aid declarations and records against the list above.