Communal charity leaders were cautioned by leading tax experts to be ready for heightened scrutiny from regulators, at a charity seminar in Hendon on Monday.

The event at the Pillar hotel was organised by BDO LLP, together with Brian White Limited and in association with the Interlink Foundation, in the face of the increasing number of charities affected by regulatory action.

There was high interest in the event with some people having to stand at the packed venue. The audience included charity specialist advisors and accountants.

Communal charities send millions of pounds each year to overseas causes, attracting significant tax concessions.  Speakers Daniel Dover and Talia Greenbaum from BDO LLP, together with Brian White, stressed the powers of the tax authority HMRC to demand supporting documentary evidence for all charity payments that are sent overseas – or be landed with substantial charges. Late filing is an invitation for an investigation.

Charities were cautioned to ensure they have a sufficient trail of evidence showing they have carried out due diligence on the beneficiary overseas organisation, as well as adequate monitoring checks on how monies are subsequently spent.  The financial penalties for failing to do this are substantial recharge of tax reliefs.

Charles Pascoe of BDO LLP reiterated what constitutes a charitable payment eligible for tax relief.  He warned that charities misstating income from events, raffles, school fees or similar risk being hit with punitive charges from HMRC.

But speakers rejected suggestions from the audience that the UK may be heading in a direction where charitable payments to overseas organisations will be outlawed altogether, or that there is targeted attacks on Jewish charities that should be resisted.

Arguing that, ‘prevention is better than cure’, Talia Greenbaum called for readiness for HMRC enquiries, and urged charity leaders to work with their advisors to put the right processes in place.  She asked the accountants and lawyers in the audience to ensure their charity clients are ready, and drew attention to the affordable services for charities provided by the Interlink Foundation.

Because of the high demand and interest, Interlink Foundation has confirmed that they want to organise similar events again, both in Manchester (to include Gateshead) and London.