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HM Revenue and Customs (HMRC) has revised its guidance on its application of the 'fit and proper
persons' test (visit http://www.hmrc.gov.uk/charities/guidancenotes/chapter2/fp-persons-test.htm for further information). At present this guidance only applies to charities claiming a repayment of tax under Gift Aid but is likely to be extended to other charity tax reliefs later in the year.

What has changed?
In summary, for tax purposes, charities must be able to demonstrate that they have taken steps to ensure that their managers are 'fit and proper persons'. 'Managers' include the charity's trustees, directors and any other official or employee having general control over the running of the charity or the application of its assets. What does this mean for charities? Existing charities will not need to provide anything to HMRC immediately, but will need to notify HMRC of future changes in certain individuals, such as the authorised official (ie the person authorised to deal with HMRC in relation to the charity's tax affairs) and nominees. On the first occasion that an existing charity needs to notify HMRC of such a change, it should also provide HMRC with details of two to four 'responsible persons' (ie individuals with overall responsibility for running the charity). From that date, the responsible persons and the authorised official will be the only persons on whose authority HMRC will act.