Recent approaches by HMRC to some charities about their potential liabilities under the bond washing legislation have caused some concern amongst those charities and their representative bodies.

HMRC have issued a note on their website advising that this is not a “crackdown” on charities. The note is reproduced below:

“HMRC has recently approached some charities about their potential liabilities under the bond washing legislation. We are aware that these approaches have caused some concern amongst charities and their representative bodies.

The longstanding legislation on bond washing does not just apply to charities. It applies equally to all. There is no “crackdown” on charities in this area but charities do need to be aware of the tax implications of certain transactions. Having identified that some charities have overlooked the potential for liabilities in this area, HMRC will be working with charities and their representative bodies on the way forward.

Any charities that have specific concerns about their own position should contact Graeme Slater at HMRC Charities on 0151 472 6222.”