HMRC revises CRS guidance in light of human rights concerns

Following significant input from the Association of Charitable Foundations (ACF) and other infrastructure bodies, HMRC has updated and completed its guidance for charities on the Common Reporting Standard (CRS).

The guidance, which stems from the UK’s involvement in international efforts to combat tax evasion (also known as the Automatic Exchange of Information), explains what the regime will mean for charities that fall under the definition of ‘financial institutions’.

Initial drafts of the guidance had met with resistance from the sector, with concerns being raised by ACF, Charity Finance Group (CFG) and the Ariadne Network of human rights funders. 

The concerns centred on a lack of clarity about who would be affected and in what way, the burdensome bureaucratic requirements, and the potential human rights implications.

ACF sought specific clarity about the implications for endowed foundations, many of which face onerous due diligence and reporting duties similar to those expected of banks and investment houses.

In addition to intensive engagement with HMRC to resolve and clarify these issues, ACF has worked alongside CFG construct a series of materials designed to aid charities in understanding and fulfilling their obligations under the regime.

Speaking about the process, new ACF Chief Executive Carol Mack said:

“ACF welcomes the completion of this guidance, which follows a long and intensive period of engagement from us and our partners.

Thankfully, ACF was able to highlight the implications of CRS for endowed foundations by drawing on our knowledge of, and connection to, our varied and supportive membership.

However, it is extremely disappointing that HMRC did not engage at an early stage with the charity sector – the abject failure to do this has created months of unnecessary anxiety and uncertainty.

While we fully support the aim of combatting tax evasion, we deeply question the need to inflict this degree of red tape on funders and will be monitoring implementation closely in the coming months and years.”


HMRC's guidance for charities can be found here, and guidance on the protection of human rights available here. ACF has also prepared a set of materials to assist charities in understanding and complying with their obligations under the regime. Click here for more.

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