HMRC has published new guidance for charities detailing the reporting requirements of the recently introduced Common Reporting Standard (CRS). Unlike its American counterpart, FATCA, there is no exemption to reporting requirements for registered charities under CRS.

This means that if your charity is an Investment Entity it will be considered a financial institution and must report to HMRC any relevant payments it makes to tax residents outside the UK.

If a charity is considered a Non-Financial Entity, or if its income comes mostly from gifts, donations, grants or legacies, then it won’t need to provide its financial account information. However, if a charitable trust, foundation, company or similar entity is a financial institution, any payments it makes to beneficiaries under its charitable objectives may need to be reported.

If a charity is in any way uncertain as to its status in relation to the CRS, we would encourage them to seek professional advice to make certain of their situation and any subsequent reporting requirements. HMRC is also hosting an educational event for charities and their advisers on 29 June 2016, which will include speakers from HMRC and charity representatives, and small group discussions on due diligence best practice.