HMRC published updated guidance on the fit and proper person test last month. The test is used to ensure that charities are not managed or controlled by individuals who present a risk to the charity's tax position.
The updated guidance now includes a detailed description, with reference to the Disclosure of Tax Avoidance Schemes (DOTAS) rules and the general anti-abuse rule, of the circumstances in which a charity manager who has used or been involved in the design or promotion of tax avoidance schemes may be deemed not to be a fit and proper person.
Please see click here for the updated guidance in full.
These changes are in keeping with those made by HMRC to its fit and proper person declaration and help sheet.
HMRC has also added the following useful points to the guidance:
- An individual will not be considered to be actively involved in designing or promoting tax avoidance schemes simply because they work for, or in, the same organisation or partnership as an individual who has been actively designing or promoting schemes.
- In all cases, HMRC will consider all of the relevant circumstances, such as the nature and size of the scheme, the extent of the manager's involvement and the likelihood of their future participation in such schemes.
The updated guidance also includes a new section explaining how HMRC defines tax avoidance.