CTG recently secured a response to a Parliamentary Question on the number of charities required to submit Corporation Tax returns, the number paying Corporation Tax, and the number receiving filing penalties.
The figures show that just over 20,000 charities were required to submit a Corporation Tax return in 2024/25, an increase of around 25% compared with five years ago. HMRC has also indicated that it wishes to increase the number of charities within the Corporation Tax filing regime, suggesting that filing obligations will continue to expand.
Whilst only a relatively small number of charities ultimately pay Corporation Tax, the number of charities receiving penalties for late filing has increased significantly in recent years. This suggests that many charities continue to face practical challenges in identifying filing obligations and navigating the Corporation Tax system.
At a time when HMRC is pursuing digitalisation and simpler tax administration, charities continue to report practical difficulties in understanding when returns are required and ensuring that filing obligations are met. CTG believes there is a strong case for reviewing how filing obligations are communicated and how charities are supported in meeting them.
We have raised these concerns with parliamentarians, Ministers and HMRC and will continue to press for improvements. We were encouraged to see the Government announce a review of Corporation Tax administration in the Budget, which provides an opportunity to address some of the issues highlighted by CTG members.
Corporation Tax administration was among a range of issues discussed recently with the new Shadow Exchequer Secretary to the Treasury as part of CTG’s ongoing engagement programme to ensure that the tax and administrative challenges facing charities remain firmly on the political agenda.