New charity tax rules from April 2026: compliance, Gift Aid and HMRC changes

Introduction to charity tax rules from April 2026

Charities and Community Amateur Sports Clubs (CASCs) will enter a more demanding compliance environment from April 2026, as new charity tax rules take effect. These changes form part of the government’s wider effort to close the tax gap and strengthen HMRC oversight of reliefs such as Gift Aid.

While most organisations already meet their obligations, trustees should expect greater scrutiny and a higher standard of evidence across key processes. As stated by the government, ‘The majority of charities meet their tax obligations, but a small minority persistently fail to comply and yet still claim tax reliefs such as Gift Aid.’

Alongside these tax developments, charities should also consider wider regulatory changes affecting financial reporting and audit thresholds. Our article on Navigating the new charity SORP and new audit thresholds in 2026 explores these in more detail and provides additional context on the evolving compliance landscape.

Key charity tax rule changes from April 2026

In summary, the key charity tax rules from April 2026 include:

• A stricter test for tainted donations, limiting access to tax relief where donors receive a financial benefit from the charity or CASC in return for the donation
• New requirements for approved charitable investments, ensuring they support charitable purposes rather than tax outcomes
• An expanded definition of attributable income, bringing legacies within scope and requiring appropriate application of funds

How the new charity tax rules affect compliance and governance

The tightening of the tainted donation rules will require charities to take greater care when assessing donor arrangements. Where any form of benefit arises, even indirectly, trustees must ensure this does not compromise eligibility for tax reliefs such as Gift Aid. This places increased importance on clear documentation, well defined processes, and consistent review of donation structures.

Changes to approved charitable investments reinforce the expectation that all investment decisions must align with a charity’s objectives. Structures that prioritise tax efficiency over charitable impact are likely to face increased challenge. Trustees should demonstrate how each investment delivers a genuine benefit to the organisation’s purpose, rather than creating an advantage for individuals connected to the arrangement.

The revised approach to attributable income introduces a notable shift, particularly in relation to legacies. Funds received in this way must now be clearly directed towards charitable activities or risk a tax charge. This increases the need for careful tracking of income and stronger internal controls over how funds are allocated and applied.

HMRC enforcement and trustee responsibilities

Alongside these measures, HMRC is strengthening its compliance powers. This includes the ability to take action against trustees and charity managers in cases of persistent non-compliance, supported by updated guidance on the Fit and Proper Persons test. While these powers target a small minority, they reinforce the importance of strong governance and accountability across the sector.

Preparing for charity tax changes in 2026

For well-run charities, the practical impact is a renewed focus on compliance fundamentals. Accurate record keeping, timely filing, and well managed Gift Aid processes remain essential to maintaining confidence and reducing risk. Reviewing existing procedures now will help ensure organisations remain aligned with the new charity tax rules from April 2026.

If you would like to discuss how these changes affect your charity, or require support with your wider corporate and business tax compliance obligations, our team would be pleased to support you. Contact us today by completing the form below.

Photo by Tolu Akinyemi 🇳🇬 on Unsplash