Charity payments to Overseas Bodies

HMRC has announced that it has updated the section on Payments to overseas bodies in the detailed guidance notes for charities.

Charities might like to take a look at this guidance, which deals with payments to bodies outside the UK and whether these can be considered to be charitable expenditure. The criteria are that:

  • the payment is made to a foreign supplier of goods or services in the ordinary course of the charity's activities; or
  • the charity takes reasonable steps to ensure that the payment is applied for charitable purposes.

The guidance explains what steps HMRC thinks the charity making the payment should take to ensure it is applied for charitable purposes. There are a few potential traps to avoid, eg the charity must take these steps even where the payment is made to its own overseas branch or office. And it is not sufficient for the charity to establish that the overseas entity is a charity under the domestic law of the host country.

The full text of the appropriate section of the guidance can be opened by clicking on the link below:-

HMRC Guidance - Payments to overseas bodies

Please contact our Charity Team for more information about how this guidance will affect your charity.