Charities are included in the rules that require large businesses to publish a tax strategy. The rules will apply if in the previous tax year you have either a:

• Turnover above £200m
• Balance sheet over £2bn

Your first strategy should be published before the end of your first financial year commencing after 15 September 2016. Further information can be found on GOV.UK here.

Importantly for charities, the definition of turnover will be the same as that for the Senior Accounting Officer rules – this follows representations by CTG to HMRC officials. The guidance for those rules is here. They explain: “Corporates which are charities almost certainly receive donations and other voluntary income which does not derive from the provision of goods and services. This would not therefore constitute turnover”.

This will mean a number of charities will fall below the £200m turnover threshold. Our understanding from HMRC is that voluntary income will be interpreted widely to include grant income and income generated from the sale of donated goods.

Charities still have the option to provide a Tax Strategy if they wish, but this provides greater flexibility and ensures consistency in definitions across legislation and guidance.

Full HMRC guidance can be found here.