| New guidance on the fit
and proper persons test for managers of
charities has been issued. The guidance
replaces the original version published in
April 2010 and incorporates significant
revisions, in particular on which managers
charities or Community Amateur Sports
Clubs (CASCs) should notify HM Revenue &
Customs (HMRC) about.
The Finance Act 2010 introduced a new
definition for tax purposes of charities
and other organisations entitled to UK
charity tax reliefs, which includes a
requirement that to be a charity, an
organisation must satisfy the “management
condition”.
The new definition applies to Gift Aid
with effect from 1 April 2010 and is due
to be extended to other charity tax
reliefs later this year. It follows that
this guidance applies at present only to
charities claiming repayments of tax under
Gift Aid.
For a charity to satisfy the management
condition, its managers must be fit and
proper persons. The legislation does not
define “fit and proper” and the guidance
sets out how HMRC applies this test to
those who have the general control and
management of the administration of the
charity.
HMRC assumes that all people appointed
by charities are fit and proper persons
unless they hold information to show
otherwise. Provided charities take
appropriate steps in appointing staff,
then they may assume that they meet the
management condition at all times unless,
exceptionally, they are challenged by HMRC.
However, where HMRC finds a manager of
a charity is not a fit and proper person,
a charity will not necessarily lose
entitlement to the charity tax relief as
HMRC can treat a charity as having met the
management condition in certain
circumstances.
Link:
HMRC guidance |
