Do charities pay tax?

uncle_ben_2

I know someone who sits on the board of a local charity, and he asked me if charities have to pay tax on interest earned in their bank account.

I don't have a clue, and was wondering if someone here would be able to help?

lamb7994

I'm not sure myself but it might bee worth looking at the following site:
www.charity-commision.gov.uk

i'll have a search and let you know if i find anything.


James

Debt_Free_Chick

uncle_ben wrote:

I know someone who sits on the board of a local charity, and he asked me if charities have to pay tax on interest earned in their bank account.

The charity should be employing a Clerk or Secretary to deal with these issues. A board member should not have to deal with "administration".

The tax rules are complex - there are some exemptions, especially for VAT on fund-raising events, but there are rules about what constitutes an event and the number of events that can take place in any single year.

In general "profits" are exempt - but the rules are complex. There are exemptions for certain trading activities - but not all. Where a charity has trading profits which are not exempt, they are assessed for income tax, if the charity is a trust - otherwise, they are assessed for corporation tax.

Sorry, but there is no simple answer to this.

uncle_ben_2

Since posting I have checked out the inland revenue website (should have looked there first), and there are exemptions from tax (VAT for example), but bank interest is tax deductable.