British Government Tightens Checks on Charity Tax Breaks

Estimates that tax fraud involving British charities amounts to between $95-million and $160-million a year are behind a new government move to refuse tax relief to charities if regulators believe a trustee or senior manager is untrustworthy, reports Third Sector Online.

Britain’s revenue and customs agency introduced the “fit and proper persons” test in April alongside legislation that allows nonprofit groups in other European Union countries to claim breaks on donations from British taxpayers. Extending the so-called Gift Aid without strengthening regulation could increase fraud by more than $700-million a year, according to the customs service.

Many charity lawyers and accountants have pushed for British organizations to be exempted from the test.