Documents That You Need to Protect for Your Charity

Documents That You Need to Protect for Your Charity

The most successful non-profit organisations take full advantage of the tax benefits that come with being a charitable group and that means organising a lot of paperwork.

HM Revenue and Customs have a variety of tax relief benefits for charities that use money for benevolent goals. However, in order to make sure you are getting all of the benefits you are due, it is important to keep your financial documents in a safe and orderly place. Charities often have a variety of files and documents that they need to organise and keep safe but here are a few important ones:
  • Proof that you are a recognised charitable organisation in the form of your HMRC reference number.
  • Records of both taxable and charitable income that can help you keep track of your taxes and finances.
  • Records from any land purchase that is used to further your charity’s goals.

Your HMRC Reference Number

After you apply to be officially recognised by HMRC, they will send you a reference number that you will use to verify your status as a charity. This number gives you access to a host of tax relief benefits and governmental aid. It can even help you get grants if you meet other criteria as well. When they send your reference number, be sure to file it away in a safe place.

Records of Taxable and Charitable Income

HMRC gives tax relief to charities for tax on many different sources of income as long as they are applied to charitable purposes. If you receive money from gifts, bank interest or investment returns that you put towards furthering the success of your charity you can receive tax relief. Because of this, you should keep any and all records of gifts, bank statements and any other proof of a monetary transaction in a safe place. On the other hand, you should also keep records of taxable income that your charity receives. This includes any income that is not solely applied to the charity. You will need these records to ensure smooth and simple tax payments and organised finances. Your charities tax records should be kept in an orderly space that is safe from fire and burglary. If information is kept only on paper, you can use a fire resistant filing cabinet to store your documents. However, if you keep records on paper and digital hard drives you might need a security safe that can keep digital and paper files safe from fire and theft.

Records from Land Purchases

Today, Land Registry keeps track of land and property ownership in UK and the need for actual physical title deeds is all but non-existent. However, it is important for a charity to keep all records of a land purchase safe. If a mistake is made, you will be able to back up any claims with evidence. Plus, if you can prove that your land was purchased for the charity to use or as an investment which gains profits that go to your charity, you can receive relief from the Stamp Duty Land Tax. Investigate other tax benefits you might be able to get from HMRC and make sure you are keeping any document that you may need later. Staying organised and keeping important items safe is important for any office, especially a charity office. Photo credit: Some rights reserved by Images_of_Money