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:

  • Latest news and updates
  • 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.

Latest news and updates

Job Retention Scheme

Members are reminded that the Coronavirus Job Retention Scheme is changing from 1 July and Government guidance has been updated to explain how flexible furloughing will work and the level of Government support available to employers at each stage of the Scheme. Full details can be found on the CTG website here and links to all the available Job Retention Scheme guidance can be found in the CTG hub here. The Government has also issued a press release on flexible furloughing here.

Helpful graphics of the of the month by month changes to the Job Retention Scheme from 1 July can be seen here, while a graphic of key dates can be seen here. Employees will continue to receive 80% of their salary (capped at £2.5k) but employer contributions increase from August. Claims relating to the period up to 30 June 2020 must be completed by 31 July 2020. It is now possible to make claims for periods relating to 1 July onwards.

A number of the HMRC guidance notes have been updated:

Also, if your charity has made an incorrect claim under the Job Retention Schemes correctly, HMRC has published instructions for correcting claims and paying money back. 

Support calls for a Gift Aid Emergency Relief package

CTG is calling on the Government to temporarily increase the level of Gift Aid that can be claimed on donations. Full details can be found in this briefing – Gift Aid Emergency Relief Package

The proposals have already received positive media and social media coverage and CTG has received positive feedback from HMRC officials as to the potential technical viability of the proposals.

How can you help? You can support the campaign on social media using the hashtags #GiftAidRelief and #NeverMoreNeeded and following the @CharityTaxGroup feed. You can also confirm your support by e-mailing [email protected], explaining how the proposal would help your charity.

For example, Robin Meltzer, Director of Fundraising, Brain Tumour Research, said in a statement on their website: “It is at times like this that the third sector and the Government need to think differently and explore ways to protect vital charitable income. A temporary increase in the rate of Gift Aid makes sense because it uses a system which already exists and which has the confidence of the public. I hope this idea is expedited to help all charities during the current downturn.”

End of the VAT deferral period

The VAT payment deferral period ended on 30 June 2020. This means you’ll need to:

  • set-up cancelled direct debits in enough time for HMRC to take payment
  • submit VAT returns as normal, and on time
  • pay the VAT in full on payments due after 30 June (remember for VAT periods ending May 2020 this could be by 7 July 2020)

Any VAT payments you have deferred between 20 March and 30 June should be paid in full on or before 31 March 2021. You can make additional payments with subsequent returns.

Contact HMRC if you are unable to pay the VAT due and may need time to pay as soon as possible and before the payment is due.

HMRC has now published a form to instruct banks and building societies to set up VAT direct debits for customers who have signed up to Making Tax Digital for VAT.

Lobbying efforts to secure the financial future of charities

At the start of the crisis, the Chairman of the Charity Tax Group (CTG), John Hemming, has 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 in this briefing – Gift Aid Emergency Relief Package.

Financial support packages

Business rates reliefs and cash grants

An overview of Expanded Retail Discount (100% rates relief), Small Business Grant Fund (£10k cash grant) and Retail Hospitality and Leisure Grant Fund (up to £25k cash grant per eligible property) can be found here.

Specific funding schemes are also available in ScotlandWales and Northern Ireland.

Job Retention Scheme

The Coronavirus Job Retention Scheme is a temporary scheme from 1 March to 31 October 2020 (having been extended a number of times). It is designed to help employers whose operations have been severely affected by COVID-19 to retain their employees and protect the UK economy.

CTG’s Coronavirus Job Retention Scheme guidance hub collates links to:

Helpful graphics of the of the month by month changes to the Job Retention Scheme from 1 July can be seen here, while a graphic of key dates can be seen here. Employees will continue to receive 80% of their salary (capped at £2.5k) but employer contributions increase from August. Claims relating to the period up to 30 June 2020 must be completed by 31 July 2020. It is now possible to make claims for periods relating to 1 July onwards.

Eligibility for charities in receipt of public funding: DCMS has provided more details on circumstances in which organisations in receipt of public funding can furlough staff under the Scheme. This information was sourced by the charity Community Leisure UK, following support from CTG and other sector bodies: “DCMS has been liaising closely with the Treasury and I can confirm that all UK-wide employers with a PAYE scheme are eligible for the Coronavirus Job Retention Scheme, this includes the public sector and charities. Employees can be on any type of contract, including zero-hour or temporary. If the funding for an organisation comes from a number of sources a judgement needs to be made on what that funding is for. If public sector funding explicitly covers staffing costs, then the money still exists to pay for staff and there is no need to furlough. If it does not cover staffing costs the organisation can furlough. Responsibility for that decision lies with the Accounting Officer of the organisation who pays the public funds so that they are clear there is no duplication“.  HMRC has confirmed to CTG that it agrees with this analysis.

Volunteering while on furlough: A furloughed employee can take part in volunteer work, if it does not provide services to or generate revenue for, or on behalf of their organisation or a linked or associated organisation. In practice this prohibits volunteering for your own employer while furloughed. Your organisation can agree to find furloughed employees new work or volunteering opportunities whilst on furlough if this is in line with public health guidance. A petition asking that furloughed charity employees be allowed to volunteer for their charity can be signed here.

Business loans and guarantees

The Government has 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

Tax reporting requirements and support

  • 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. 
  • 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.
  • VAT deferral: The VAT payment deferral period ended on 30 June 2020. This means you’ll need to:
    • set-up cancelled direct debits in enough time for HMRC to take payment
    • submit VAT returns as normal, and on time
    • pay the VAT in full on payments due after 30 June (remember for VAT periods ending May 2020 this could be by 7 July 2020)

    Any VAT payments you have deferred between 20 March and 30 June should be paid in full on or before 31 March 2021. You can make additional payments with subsequent returns. Contact HMRC if you are unable to pay the VAT due and may need time to pay as soon as possible and before the payment is due.

  • 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.We hope to learn more when we meet (virtually!) with senior officials in the Charities Team at HMRC on Tuesday. 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.
  • Company filings, AGMs and other general meetings: BEIS has published guidance on the requirements for organsiations during the coronavirus pandemic.
  • HMRC helpline: All businesses and self-employed people in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC’s Time To Pay service. These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities. In addition to the VAT deferral available (see above) HMRC will consider deferring payments for Corporation Tax, PAYE and NICs where organisations are affected by the virus. If you have missed a tax payment or you might miss your next payment due to COVID-19, please call HMRC’s dedicated helpline: 0800 0159 559, although it is reported that these helplines have been very busy or read the guidance here. If you’re worried about a future payment, please call HMRC nearer the time. Please note that while there is no interest payable on deferral of VAT payments, we understand that any deferral of PAYE and NICs would be subject to interest – see rates here.

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): The scheme currently allows individuals to claim a taxable grant worth 80% of your average monthly trading profits, paid out in a single instalment covering 3 months’ worth of profits, and capped at £7,500 in total. If you’re eligible and your business has been adversely affected you must make your claim for the first grant on or before 13 July 2020. This scheme is being extended. If you’re eligible for the second and final grant, and your business has been adversely affected on or after 14 July 2020 you’ll be able to make a claim from 17 August 2020. You can make a claim for the second grant if you’re eligible, even if you did not make a claim for the first grant. Find out more about the extension to the scheme.

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

Tax and finance measures and guidance

  • 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.
  • Protection of commercial tenancies: Commercial tenants who cannot pay their rent because of coronavirus will be protected from eviction. Many landlords and tenants are already having conversations and reaching voluntary arrangements about rental payments due shortly but the government recognises businesses struggling with their cashflow due to COVID-19 remain worried about eviction.These measures mean no business will be forced out of their premises if they miss a payment in the next 3 months. As commercial tenants will still be liable for the rent after this period, the Government is also actively monitoring the impact on commercial landlords’ cash flow and continues to be in dialogue with them. This will be important for charities both as tenants and landlords. Additional information can be found here and HMRC has also published guidance for landlords, tenants and local authorities.
  • 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.
  • Pay no import duty and VAT on medical supplies, equipment and protective garments: The Government has announced that certain organisations can now pay no import duty and VAT on protective equipment, relevant medical devices or equipment brought into the UK from non-EU countries during the COVID-19 outbreak.
  • Insurance: Businesses that have cover for both pandemics and government-ordered closure should be covered, as the government and insurance industry confirmed on 17 March 2020 that advice to avoid pubs, theatres etc is sufficient to make a claim. Insurance policies differ significantly, so businesses are encouraged to check the terms and conditions of their specific policy and contact their providers. Most businesses are unlikely to be covered, as standard business interruption insurance policies are dependent on damage to property and will exclude pandemics.
  • 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.
  • Gift Aid payments by HMRC: CTG was aware of some speculation about Gift Aid payments by HMRC with some reports of slow payments, while others had heard they were speeding up! We contacted the Charities Operational Team at Bootle and they told us “We have had a few IT issues due to remote working which are now resolved . There should be no delays in any payments going out and we are trying our best to get the payments out quicker”.
  • 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.
  • Companies House filings: All companies must send their accounts, reports and confirmation statements to Companies House every year. If a company’s accounts are filed late, the law imposes an automatic penalty. If, immediately before the filing deadline, it becomes apparent that accounts will not be filed on time due to your company being affected by Coronavirus (COVID-19), you may make an application to extend the period allowed for filing.
  • Procurement Policy Note 02/20 – Supplier relief due to COVID-19: This note sets out information and guidance for public bodies on payment of their suppliers to ensure service continuity during and after the current coronavirus outbreak.
  • Contactless payment limit: Contactless card spending limit will rise from £30 to £45 on April 1 to curb spread of #COVIDー19 in supermarkets by cutting queues. 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.
  • Spending Review: The Government has confirmed that the planned Spending Review, due to take place in July 2020, will be delayed, so Ministers can focus on tackling the coronavirus emergency.
  • Tax Tribunals: All tax tribunals at the First Tier Tribunal (FTT) and Upper Tribunal level have been postponed unless proceedings can be held online.
  • 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.
  • VAT correction: Due to temporary measures put in place to stop the spread of Coronavirus taxpayers can no longer submit form VAT652 by post. Email it to [email protected]
  • 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.

 

  • Business loans: The Government has announced several measures to support organisations through the coronavirus pandemic.

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. 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: 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. The Chief Executive of ACEVO has published a useful summary of discussions with DCMS on the scope of the funding. This information is still to be confirmed but it provides a useful insight and highlights that unfortunately not all charities will be able to access this funding.
    • 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.
    • Arts Council funding: The Arts Council is making £160 million of emergency funding available for those organisations and individuals who will need it during this crisis, and they have also changed the funding requirements for individuals and organisations currently in receipt of their funding.
    • 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.
    • Heritage Emergency Fund: The Heritage Emergency Fund is now open for applications any time before 30 June 2020. The UK-wide fund – money raised from the National Lottery – addresses immediate pressures over the next 4 months for those organisations most in need.
  • Useful guidance from representative bodies and tax experts
  • Guidance from CTG Observer Members 

To add other guidance to this list please contact [email protected].

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