Coronavirus (COVID-19) Charity tax FAQs

We are currently unable to pay our tax liabilities. Is there anything available to alleviate this burden?

Valued Added Tax (VAT) payments will be deferred for 3 months. The deferral will apply from 20 March 2020 until 30 June 2020.

All UK charities and social enterprises are eligible and no applications are required as it is an automatic offer.

Taxpayers will be given until the end of the 2020/2021 tax year to pay any liabilities incurred during the deferral period.

Furthermore, all UK charities and social enterprises with outstanding tax liabilities may be eligible to receive support with their tax affairs through HMRC’s Time To Pay service.

Such arrangements are agreed on a case-by-case basis with HMRC. To access support, call HMRC’s dedicated helpline: 0800 0159 559

We are worried that we will not be able to implement the requirements of Making Tax Digital in time for the deadline, what should we do?

HMRC has confirmed that, in response to the Coronavirus crisis, the requirement to implement digital links for Making Tax Digital has been postponed until April 2021. In a letter to the Charity Tax Group, HMRC says: “We understand that the impact of COVID-19 is creating extremely difficult times for all, and we are committed to helping in every way possible all those businesses facing unprecedented challenges. Therefore, we are providing all MTD businesses with more time to put in place digital links between all parts of their functional compatible software. This means that all businesses now have until their first VAT return period starting on or after 1 April 2021 to put digital links in place.”

The Charity Tax Group has welcomed the news: “[We] welcome this announcement and had been calling for this postponement to reflect the disruption facing charity finance teams and software suppliers, due to remote working and other more pressing work priorities. Most organisations would have been required to implement digital links by April 2020, unless they were deferred (which was true of many charities), in which case their original deadline was October 2020.”

The law and practice referred to in this article or webinar has been paraphrased or summarised. It might not be up-to-date with changes in the law and we do not guarantee the accuracy of any information provided at the time of reading. It should not be construed or relied upon as legal advice in relation to a specific set of circumstances.

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