Home » Coronavirus information hub for charity tax and finance professionals

Coronavirus information hub for charity tax and finance professionals

To support its members and the wider sector, CTG has collated guidance and announcements to inform charities during these difficult times. This page is updated regularly and content includes:

  • Lobbying efforts to secure the financial future of charities
  • Financial support packages and guidance for businesses
  • Guidance, support and updates for charity tax and finance professionals including:
    • Government updates and guidance
    • Tax and finance announcements and guidance
    • Charity specific announcements and guidance

If your charity finds this content useful, please consider making a financial contribution towards our work as we are reliant on voluntary membership payments from charities. A donation form can be downloaded here.

Lobbying efforts to secure the financial future of charities

At the start of the crisis, CTG wrote to the Chancellor requesting immediate support for charities through the tax system during the COVID-19 pandemic. Following a meeting with officials, CTG Chairman, John Hemming, wrote to the Deputy Director responsible for charities policy at HMRC, on 3 April 2020, focusing on COVID-19 Response Activity by charities, cashflow issues facing charities and possible solutions, and practical administrative issues for charities including tax reporting requirements and deadlines. HMRC has now provided feedback on a number of these issues and updates are included in the hub.

On 9 April, the Chancellor announced that charities across the UK will receive a £750 million package of support to ensure they can continue their vital work during the Coronavirus outbreak. We await details of how the funds will be distributed, but we understand that support will be split between small charities operating locally and charities providing front-line COVID-19 support services. We appreciate that this will not support all charities and will continue to push for support for all charities suffering as a result of the current crisis. This followed sector efforts – supported by CTG – to secure a special financial support package for charities.

A coalition of sector bodies, including CTG, are calling on the Government to temporarily increase the level of Gift Aid that can be claimed on donations. Full details can be found here.

Financial support packages

A helpful collation of financial support for voluntary, community and social enterprise (VCSE) organisations to respond to coronavirus (COVID-19) is available here.

Restart Grants

The Restart Grant scheme supports businesses in reopening safely as COVID-19 restrictions are lifted. Grants will be available from 1 April 2021 but you can submit applications in advance. More here.

Eligible businesses in the non-essential retail sector (including charity shops) may be entitled to a one-off cash grant of up to £6,000 from their local council. Eligible businesses in the hospitality, accommodation, leisure, personal care and gym sectors may be entitled to a one-off cash grant of up to £18,000 from their local council. For charities this includes scout huts, village halls, botanical gardens, attractions, zoos, concert halls, museums and galleries.

Business rates: Expanded Retail Discount

The Government will continue to provide eligible retail, hospitality and leisure properties in England with 100% business rates relief from 1 April 2021 to 30 June 2021. This will be followed by 66% business rates relief for the period from 1 July 2021 to 31 March 2022, capped at £2 million per business for properties that were required to be closed on 5 January 2021, or £105,000 per business for other eligible properties.

Job Retention Scheme

The Coronavirus Job Retention Scheme has been extended by five months until the end of September. Employer contributions will be required from July, where it requires a 10% contribution and then a 20% contribution from August. The Government has collated guidance notes in a collection, which can be found here.

Business loans and guarantees

From 6 April, and once current Covid loan schemes end, the Government will introduce the Recovery Loan Scheme that will provide support to businesses – in the form of loans up to £10m per business – as they re-open until 31 December. Organisations will be able to apply for a loan if they are trading in the UK and they can show that the business:

  • is viable or would be viable were it not for the pandemic
  • has been impacted by the coronavirus pandemic
  • is not in collective insolvency proceedings – further details will be provided in due course

Business that have received support under the existing COVID-19 guaranteed loan schemes will still be eligible to access finance under this scheme, if they meet all other eligibility criteria.

Separately, the Government previously announced £billions in loans and guarantees to support businesses affected by COVID-19. This page includes information on:

  • Coronavirus Business Interruption Loan Schemes
  • “Bounce Back” Loans of £2k-£50k
  • COVID-19 Corporate Financing Facility
  • Government funding to support high-growth companies and research and development
  • Government Business support finder tool

Reduced rate of VAT for hospitality, holiday accommodation and attractions

The Government will extend the temporary reduced rate of 5% VAT for goods and services supplied by the tourism and hospitality sector until 30 September 2021. A 12.5% rate will apply for the subsequent six months until 31 March 2022.

Tax reporting requirements and support

  • Gift Aid on cancelled events: Members will recall that following lobbying by CTG, HMRC published guidance confirming that charities can apply Gift Aid where money due to be refunded for an event (including challenge events for which there will be registration fees instead of tickets) cancelled due to COVID-19 is donated (as long as a valid Gift Aid Declaration is held. A number of fundraising charities have asked CTG whether cancelled events includes challenge events for which there will be registration fees (instead of tickets) that would be refundable, if the event is cancelled. CTG’s initial reaction was that it should be possible as it was within the spirit of the measure, but we asked HMRC for confirmation and the response was positive. Full details on the process to undertake can be read here.
  • Partially exempt VAT registered businesses affected by coronavirus: HMRC has published a brief that outlines an accelerated process for VAT registered businesses to request temporary alterations to their partial exemption methods (including combined methods) to reflect changes to their business practices because of the coronavirus (COVID-19) pandemic.
  • VAT deferral: HMRC has updated its guidance on deferred VAT. If you deferred VAT payments due between 20 March 2020 and 30 June 2020 and still have payments to make, you can:
    • pay the deferred VAT in full, on or before 31 March 2021
    • join the VAT deferral new payment scheme – the online service is open between 23 February 2021 and 21 June 2021
    • contact HMRC on Telephone: 0800 024 1222 by 30 June 2021 if you need extra help to pay

You may be charged interest or a penalty if you do not pay the deferred VAT in full by 31 March                   2021; opt into the new payment scheme by 21 June 2021; or agree extra help to pay with HMRC                 by 30 June 2021.

  • Meeting imminent tax reporting deadlines: Many members may be concerned about their ability to meet HMRC filing deadlines that are fast approaching.  We have contacted HMRC and understand that no definitive guidance has been issued, but the impression we have is that HMRC are likely to be sympathetic in these cases. However, wherever practical deadlines should be met as HMRC have not confirmed what they will do where deadlines are missed. What we have agreed with HMRC is that it is advisable if any deadline is to be missed that HMRC are made aware of this in advance of the deadline.  If your charity has a Customer Compliance Manager (CCM) this would be a useful first point of call. Otherwise you should contact the HMRC helpline.

Statutory Sick Pay and support for individuals

  • Statutory Sick Pay: HMRC has published guidance on claiming back Statutory Sick Pay paid to employees due to COVID-19. The guidance details whether organisations are able to use the Coronavirus Statutory Sick Pay Rebate Scheme to reclaim employee’s coronavirus-related Statutory Sick Pay.
  • Self Employed Income Support Scheme (SEISS): During Budget 2021, the Government announced that there would be two further grant round for the self-employed. Those whose turnover fell by 30% or more will be eligible to receive a grant worth 80% of average monthly trading profits.
  • Accounting Requirements for the Creative Industry Tax Reliefs: CTG asked HMRC a question on accounting Requirements for the Creative Industry Tax Reliefs, following queries from member charities. CTG highlighted that these reliefs are contingent upon audited statutory accounts for the entities but, in the current climate, auditors are saying that this will delay audits if they are unsure over the going concern principles – assuming audits are able to continue in the first place. CTG noted that one option is to disclose differently in the accounts but that another option could be for HMRC to relax the requirement for this and issue interim payments. HMRC has now responded stating: “These reliefs are contingent upon audited statutory accounts for the entities but you state that due the current climate, audits will be delayed and so you ask whether the deadline can be extended.  As you know, claims for any of the creative industry tax reliefs are made at the end of a company’s accounting period and it is a statutory requirement for accounts and computations to be submitted with any claim. As the accounts form an integral part of the claim, this is not a condition that HMRC can legally relax.“ 

Other guidance and announcements of interest to charity finance and tax professionals

  • Maintain VAT thresholds for 2 years from 1 April 2022: The VAT registration and deregistration thresholds will be frozen at £85,000 until 2024.
  • Budget 2021 Funding: The Budget announced support for charities supporting veterans on mental health issues and victims of domestic abuse, as well as zoos.
  • Tax and home-working expenses: HMRC has published guidance on the tax status of expenses incurred by employees working from home due to coronavirus. The full guidance is reproduced in full on the CTG website here. The Chartered Institute of Taxation (CIOT) has also produced a guide to help employees and employers understand the tax implications when employees are working from home. Budget 2021 extended this scheme to the 2021-22 tax year.
  • Cultural tax reliefs: The Arts Council has updated its guidance on cultural tax reliefs in the context of the Coronavirus outbreak.
  • Off-payroll-working: Reforms to the off-payroll working rules, which would have applied for people contracting their services to large or medium-sized organisations outside the public sector, will be delayed from 6 April 2020 until 6 April 2021.
  • Post from HMRC: HMRC has reminded charities that there are some documents that they are required by law to send to the taxpayer in hard copy. As HMRC are currently unable to provide e-mail alerts when such post is sent, it may be necessary for employees to go to the office to handle correspondence from HMRC.
  • Protecting against fraud and scams: The Government is aware of emails claiming to be from HMRC offering tax rebates as a result of #coronavirus If you receive an email, text or call claiming to be from HMRC that asks you to click on a link or to give information such as your name, credit card or bank details, it’s a scam – see here for more information (it is not a scam, we promise!). The National Cyber Security Centre has also published guidance for organisations facing an increase in home working, and advice on spotting coronavirus (COVID-19) scam emails.
  • Contactless payment limit: Single contactless payments up to £100, and cumulative contactless payments up to £300, will be permitted without the need for customers (or potential donors) to input their chip and pin. If this is retained beyond the crisis, there may be a case for extending the eligible donation limit for the Gift Aid Small Donations Scheme (currently £30) but the current rules do not automatically track to this limit.
  • Gift Aid: CTG is aware that many charities are launching emergency fundraising appeals to tackle shortfalls in income. Wherever possible, please encourage fundraising teams to promote the benefits of Gift Aid to donors to maximise the value of their gift. The Gift Aid Awareness Day toolkit may be helpful in this respect.
  • HMRC to accept service of legal proceedings by email: Due to COVID-19, HMRC has requested that, where possible, new legal proceedings and pre-action letters should be served via email rather than by post. Further information can be found here.
  • Annual Leave: The Government has announced that rules on carrying over annual leave will be relaxed to support key industries during COVID-19. Relevant guidance from BEIS can be read here.

Charity specific measures and support

  • Guidance from the charity regulators: The Charity Commission has published specific Coronavirus guidance for charities, including a new section on finance considerations. The most recent update, on 29 September, stated: Updated the sections about AGMs and holding meetings online. The section in the Corporate Insolvency and Governance Act 2020 on holding meetings online has been extended from 30 September to 30 December 2020. The temporary provision allowing the postponement of AGMs ends on 30 September 2020. OSCR has also published guidance on Coronavirus for charities in Scotland.
  • Charity SORP: Due to the exceptional current circumstances, the SORP-making body for charities has issued advice on the financial reporting implications that may arise from the measures being put in place to contain the impact of the COVID-19 virus. The guidance considers the implications for the trustees’ annual report, going concern and the alternative basis to going concern when preparing accounts under the SORP. They also suggest that trustees may also find the FRC’s guidance to company Directors helpful when looking at their assessment of going concern. CTG Observer Member, Sayer Vincent, has published a series of helpful FAQs on accounting and going concern considerations.
  • Gift Aid on donations freely given to charities and CASCs while membership subscriptions have been suspended: HMRC officials have provided a helpful reminder that donations given to charities and CASCs while membership subscriptions have been suspended (due to COVID-19) may be eligible for Gift Aid, provided they are freely given, no benefits arise in consequence of that specific donation (either now or in the future) or, if provided, they fall within the legislative limits, and a Gift Aid Declaration is obtained. Read more here.
  • Practical relaxations to the operation of Retail Gift Aid while offices are closes during COVID-19: During lockdown many charities have now closed the offices in which Gift Aid claims are processed and are now working remotely. It is not always practical for mail to be redirected or collected. With Gift Aid claims due to be processed in April 2020, this has presented charities operating Retail Gift Aid Standard Method with several problems relating to Returned Mail and Oral Declarations, as they are unable to process either at this time, but still want to be able to claim Gift Aid. One of CTG’s charity members has been in conversation with HMRC’s Retail Gift Aid lead, Stephen Maudsley, and he has agreed concessions for both of these in the current climate and for this to be shared with the wider charity community – full details here. The advice has been provided in respect of Retail Gift Aid, but CTG will be asking officials whether the advice on oral declarations applies more broadly. CTG has also requested flexibility from HMRC on sending physical end-of-year letters in the light of the current lockdown.
  • Annual return filing delay: The Charity Commission has announced that any charity that needs an extension to their annual return filing deadline can contact the Charity Commission to ask for one.
  • Matters of material significance and reporting by auditors and independent examiners to the charity regulator: Joint guidance from the Charity Commission for England and Wales, OSCR and CCNI has been updated to give further examples and clarity on matters to report, particularly with respect to modified opinions. The COVID-19 situation has also been reflected to advise on reporting at times of national emergency.
  • Co-ordinating volunteers: DCMS has confirmed that it is working closely with the civil society sector on galvanising volunteers and coordinating help to those who need it most. More details on the Government’s plans will be announced as soon as possible, where details will be set out on how individuals can play their part, and how larger organisations can translate their offers of support into help for those affected. The Government has now launched NHS Volunteer Responders (also this link) which outlines how people can volunteer to help the most vulnerable people in your community who need to stay home because of coronavirus.
  • Giving safely during the crisis: The Charity Commission and Fundraising Regulator have urged people to ‘give safely’ to charities during the coronavirus crisis.
  • Fundraising: The IoF and Fundraising Regulator advise all charities to reflect seriously on whether to continue public fundraising due to the increased health risk.
  • Matters of material significance and reporting by auditors and independent examiners to the charity regulator: Joint guidance from the Charity Commission for England and Wales, OSCR and CCNI has been updated to give further examples and clarity on matters to report, particularly with respect to modified opinions. The COVID-19 situation has also been reflected to advise on reporting at times of national emergency.
  • Sector funding:
    • Charity Support package: The Chancellor has announced that charities across the UK will receive a £750 million package of support to ensure they can continue their vital work during the Coronavirus outbreak. Full details can be found here.
    • Culture Recovery Fund:  The Government has announced a £billion support package for the cultural sector, including arts venues, sports and heritage organisaitons.
    • Scottish Government’s Wellbeing Fund: This will support organisations across the third sector that are providing important services for people as a result of coronavirus.  £10m has already been allocated for immediate priorities and £7 million has been committed to provide around 2,000 charities with small grants through Corra, Inspiring Scotland, STV Appeal, SCVO and Scotland’s Third Sector Interfaces.  The remaining £33m is now open to bids from Third Sector Organisations. Charities can register their interest here.
    • Flexibility from funders: More than 250 grantmakers have signed a statement promising to support charities during the coronavirus emergency. They said that they would be understanding of difficulties and be flexible on reporting requirements and how funding is used. Other organisations in the sector have also separately pledged support and are reportedly considering further ways of helping.
    • Extensive list of funding arrangements: Ian McLintock, founder of the Charity Excellence Framework has collated a very helpful extensive list of  sources of Charity Emergency Funding.
    • £100 million response announced to help social sector organisations through the coronavirus crisis: Charities and social enterprises will be able to access more than £100m in loans and investments as they tackle the impact of the coronavirus. Emergency loans and investment will be available to organisations “within weeks”, with no fees or interest to pay for 12 months, according to the announcement made this morning by a team of social investors. Big Society Capital (BSC) and the Social Investment Business (SIB) said that the measures are designed to help charities, social enterprises and some small businesses which may not qualify for other government funding schemes, but which are seeing their trading and cash flow disrupted by coronavirus. Additional information can be found here.
  • Useful guidance from representative bodies and tax experts
  • Guidance from CTG Observer Members 

To add other guidance to this list please contact info@charitytaxgroup.org.uk.

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