Joint registration between Charity Commission and HMRC delayed

27 Nov 2014 News

Plans for the Charity Commission and HM Revenue & Customs to set up a joint registration process for charities are likely to be delayed until 2016, the Commission has said.

Plans for the Charity Commission and HM Revenue & Customs to set up a joint registration process for charities are likely to be delayed until 2016, the Commission has said.

The Commission also said it hoped to have a new searchable register up and running by Christmas, but that this was subject to external factors which it could not control.

And it said it would consult early next year on allowing charities to file their accounts using iXBRL, a system which is already required of larger charities and charitable companies by HMRC.

Joint registration portal

The Commission said that HMRC is leading on the process, and is now aiming at delivery in 2016.

The Commission has been working with HMRC to set up a single portal for charities to register since early last year. At that stage HMRC said it was aiming to deliver the process in 2015.

A joint registration process was first called for by Margaret Hodge, chair of the Public Accounts Committee, following a highly critical review of the Commission’s processes in March last year, in which she called the current system “hopeless”.

Under the current registration system, charities must register with the Charity Commission if their income rises above £5,000, unless they are exempt under one of a number of pieces of legislation, or unless they are a member of one of a number of religious denominations, including the Church of England, which are excepted from registration unless their income rises above £100,000.

Charities must also separately register with HM Revenue & Customs if they want to claim gift aid and other tax reliefs. Charities may register with HMRC without being registered with the Charity Commission, and many thousands of charities are.

To register with the Commission charities must meet three conditions in order to register, and then HMRC separately applies a fourth condition, the management condition or “fit and proper person test”, which checks that senior staff have no record of misconduct in several areas, including fraud or tax avoidance.

HMRC has only recently moved to an online registrations system of any sort. Previously charities registered by filling out a paper form.

Online register

The Commission is also hopeful that it will update its online register this year to a new format with much more information about each charity and more ability to search for and compare organisations.

The Commission hoped to set it up earlier this year but has been delayed by external suppliers.

The new register will contain information collected from charities in annual returns. Recently, the Commission has collected significantly greater amounts of data in annual returns and it will now begin to share this information with charities.

The Commission is also considering a system which would allow charities to file accounts in digital form using iXBRL, a format already used by HM Revenue & Customs, rather than sending in PDFs or physical copies.

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