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Charity - liability to pay tax?

Charity - liability to pay tax?

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A person now aged 66 founded and does voluntary work for a small charity. It is too small (size-wise/income-wise) to be registered with the Charity Commission. The volunteer occasionally give advice and represents claimants. In doing so, the volunteer receives for the charity a percentage of the financial claims recovered for the charity's clients. These receipts can be (but rarely are) several thousand Pounds. Usually, they are a few hundreds of Pounds. The volunteer is reinbursed expenses and the payments received, i.e. the percentage payments, are paid into the charity's account. The bank account is in the name of the volunteer as trustee. Does the charity or the volunteer have any liability to pay tax? HMRC was notified some years ago (Liverpool office) but wouldn't deal with it as it wasn't a registered charity (and can't be registered because it's too small). Any advice or thoughts from members, please?

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By Chris Smail
11th Feb 2011 11:00

It is not too small and it is not a charity.

There is no minimum size for registering, though reporting requirments are minimal.

Why does the 'volunteer' think that commission recieved and banked by him is not taxable?

What does he do with the money in his account? Is it disbursed for charitable purposes?

PM me or call me if you want to talk it over 0161 491 3788

 

 

 

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By [email protected]
11th Feb 2011 13:55

Charity Registration

If a charities annual income is currently less than £5,000 per year then you can not apply for registration as a charity, as this voluntary registration process is currently suspended, whilst all the formerly excepted and exempt charities are registered.

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By Chris Smail
11th Feb 2011 14:24

I should have known that!

OK so Ch Com are not registering at moment but you can and should still register with HMRC and get them to accept the charitable status of this trust. They will then ask you to confirm every few years that activities are still charitable.

 

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By lawmaniz
02nd Mar 2011 12:36

Charities; tax; registration.

Thank you to the two members who kindly took the time to reply to my query. Both provided really good and useful information. I'll be taking up Chris Smail offer to telephone him and chat about this problem. This forum is definitely very useful!

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