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Employment Taxes

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All charities, where they employ individuals, must also abide by the regulations that govern the rest of the labour market. It is crucial that charities understand these regulations, covering both the UK and abroad.

There have been a number of important changes to employment taxation in recent times and many of these are ongoing. HMRC recently migrated much of its online information to gov.uk and as part of the process information has been ‘simplified’ for ease of use, which has led to some unfortunate ambiguities. The Office of Tax Simplification has made many recommendations for changes to employment taxes; at the time of writing many of these are still to be legislated. Content in this section will continue to be updated, but where relevant we have noted issues that may be subject to change. In all cases readers should refer to the latest HMRC guidance and seek professional advice if they are uncertain.

Employment status is likely to be your charity’s biggest employer tax compliance risk. HMRC expects employers to take care with their compliance, and for tax strategy to be set at governance level. To evidence to HMRC that you have taken care with your compliance, you should pay attention to documenting procedures, policies, details of how you reached decisions, how you calculated things, how you researched an answer to a question and anything else which proves you attempted to get it right.

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