Readers are reminded that the new definition of a charity applies to any charity that claims UK charity tax reliefs and exemptions administered by HMRC, if it doesn't claim Gift Aid relief. The new definition applied from 1 April 2012 and charities are advised that they should read the Fit and Proper Persons guidance if they haven't already done so.

Charities that claim Gift Aid have been required to meet the new definition since 1 April 2010. The date from which the new definition applies depends on the specific relief or exemption.

In order to continue to be eligible to the charity tax reliefs and exemptions, charities must:

• be charities under the law of England and Wales, or would be, if they were established in England and Wales; and
• be located in the UK or an EU Member State, Iceland or Norway; and
• be registered by the Charity Commission where the law requires, or be registered by a regulator equivalent to the Charity Commission in their home country if the law of the home country requires; and
• meet the “management condition”

Broadly the people involved with the charity's finances must be “fit and proper persons”. More information on the fit and proper persons test can be found in the HMRC guide at http://www.hmrc.gov.uk/charities/tax/recognition.htm

In most cases charities will need to do nothing further because they will already have procedures in place to ensure that personnel are fit and proper persons. However charities may wish to ask trustees and other managers of the charity to make a declaration that they are fit and proper persons but that is not mandatory.

More information is available from http://www.hmrc.gov.uk/news/charity-definition.htm

“New guidance on Gift Aid declarations: What charities need to do” is available on here.