HMRC Charity Tax Return Rules
The changes to the HMRC charity tax returns for have caused some confusion. In general, most charities do not need to file a Corporation Tax return. But you are required to if you have a certain level of taxable income or HMRC formally asks for one. That formal request is called a “Notice to Deliver a Company Tax Return”, also known as a CT603 notice.
From 1 April 2026, HMRC charity tax returns must normally be filed using software, even if you have no taxable income. If you don't, you will almost certainly be fined. Tax is a complex issue and the rules may change, so if in any doubt, speak to your accountant or contact the HMRC Charity Helpline (details below).
Do Charities Normally have to File a Tax Return?
Most UK charities do not routinely file a
Corporation Tax return. A charity only needs to file a tax return if:
- HMRC sends the charity a formal Notice to Deliver a Company Tax Return (CT603), or
- The charity has taxable income or gains that are not covered by charity tax exemptions.
Quite often charities will have trading income but primary purpose trading (you are making money to help your charity’s aims and objectives) isn't liable to tax and, non‑primary‑purpose trading is, but usually only if your income exceeds the small trading tax exemption. Tax rules can be complex and may change but, in general, most small charities will not incur a corporation tax liability.
What changed on 1 April 2026?
Until 31 March 2026, charities could file a simple or “nil” tax return directly on HMRC’s website. From 1 April 2026, that HMRC service closed. If a charity is required to file a Corporation Tax return:
- It must normally be filed using commercial tax software, or
- Filed by an accountant or tax agent using software.
There is no longer any free HMRC online form, even where no tax is payable.
Are There Any Exemptions from Using Software?
There are exemptions but these are not likely to apply to most charities. HMRC may allow paper filing if the charity has a recognised reasonable excuse (such as serious accessibility issues) or files in Welsh, otherwise software is almost always required if a return must be submitted. That you can't afford the software or are extremely busy are unlikely to be accepted.
What counts as taxable income for charities?
Many types of charity income are exempt from Corporation Tax, provided these is are used for charitable purposes. A tax return may be required where a charity has non‑primary‑purpose trading - fundraising or commercial activity not directly linked to the charity’s aims, which is above the small trading exemption limits. It may also be required where:
- Income is not applied to charitable purposes.
- Certain gains on asset disposals.
The vast majority of small charities are unlikely to reach these thresholds, but it's up to HMRC to decide whether a return is required. If they request one, it's not a request, even if no tax is due, and you will be fined if you don't submit by the deadline.
What Are the Key Tax Return Deadlines
If a charity is required to file a Corporation Tax return with HMRC:
- Filing deadline: 12 months after the end of the accounting period
- Payment deadline (if any tax is payable): 9 months and 1 day after the end of the accounting period
Late filing penalties can apply even if no tax is payable.
What if My Charity Misses the Deadline?
If a return is filed late, HMRC are likely to fine you. You can:
- Appeal the penalty, if it has a reasonable excuse, and.
- Ask HMRC to take account of the charity’s circumstances.
For small charities, you might include that you have very little income, none of which would be taxable, no professional financial expertise and the pressure of work you are under, particularly if you are entirely volunteer run. To be honest, I've found them to be both helpful and understanding.
HMRC Charity Helpline
If can get free advice by contacting the HMRC charity helpline. Telephone: 0300 123 1073. Opening hours: Monday to Friday, 8:30am–5pm (excluding bank holidays)
Find the Funding and Free Help Your Charity Needs
A registered charity ourselves, the CEF works for any non profit, not just charities.
Plus, 60+ policies, 8 online health checks, the Quality Mark and the huge resource base. Our AI Ready programme and Charity Excellence Learning free online AI training courses, give non profits everything they need to make effective use of AI and stay safe.
Find Funding, Free Help & Resources - Everything Is Free.
Register Now!
This Article on Charity Tax Returns Is Not Professional Advice
This article on charity tax returns is for general interest only and does not constitute professional legal or financial advice. I'm neither a lawyer, nor an accountant, so not able to provide this, and I cannot write guidance that covers every charity or eventuality. I have included links to relevant regulatory guidance and resources to help you. However, in making use of my work you accept that I have no responsibility whatsoever for 3rd party content and that you will check to ensure that whatever you create reflects correctly your charity’s needs and your obligations. In using this resource, you accept that I have no responsibility whatsoever from any harm, loss or other detriment that may arise from your use of my work. If you need professional advice, you must seek this from someone else. To do so, register, then login and use the Help Finder directory to find pro bono support. Everything is free.
Ethics note: AI was partially used in researching this guide.
HMRC Charity Tax Returns FAQs
Do charities normally have to file a Corporation Tax return?
Most UK charities do not routinely file a Corporation Tax return. A return is only required if HMRC issues a formal notice or the charity has taxable income or gains that are not covered by charity tax exemptions.
What is an HMRC CT603 notice?
A CT603 is a formal Notice to Deliver a Company Tax Return from HMRC. If HMRC issues one, the charity must file a Corporation Tax return even if no tax is due.
When must a charity file a Corporation Tax return?
A charity must file a return if HMRC sends a CT603 notice. A return may also be required if the charity has taxable income or gains outside charity tax exemptions.
Are charities exempt from using tax return software?
Some exemptions exist but they rarely apply. HMRC may allow paper filing for recognised reasonable excuses, such as serious accessibility issues or filing in Welsh.
What counts as taxable income for a charity?
Many types of charity income are exempt from corporation tax if used for charitable purposes. A tax return may be required for non‑primary‑purpose trading above the small trading exemption, income not applied to charitable purposes, or certain asset disposal gains.
What is primary purpose trading?
Primary purpose trading directly supports the charity’s aims and objectives. This income is generally not liable to Corporation Tax.
Can charities make a profit?
Charities may generate income by carrying on trading activities which contribute directly to the furtherance of their charitable objects, or (where the purpose is to raise funds for the charity) which do not involve significant risk.
What can a charity trade?
Your charity can trade goods and services, but there are rules on what types of activities count as trading and these depend on a number of factors, including the number, nature and frequency of goods or services being sold, the charity’s intention and presence or absence of a profit motive.
Is charity trading taxable?
A charity will not pay tax on profits it makes from trading that is part of your charity’s primary purpose or which helps your charity’s primary purpose. You may have to pay tax on the profits from trading that has nothing to do with your primary purpose but not if your turnover from this type of trading is below the small trading tax exemption limit.
Are most small charities likely to pay Corporation Tax?
No. Most small charities do not reach the thresholds that create a Corporation Tax liability.
What are the Corporation Tax return deadlines for charities?
The filing deadline is 12 months after the end of the accounting period. Any tax due must be paid within 9 months and 1 day after the end of the accounting period.
How can charities contact the HMRC Charity Helpline?
Charities can contact the HMRC Charity Helpline for free advice. Telephone: 0300 123 1073, Monday to Friday, 8:30am–5pm, excluding bank holidays.
