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Scope of this book

The subject of this book is the taxation of:

(1) charities

(2) other nonprofit organisations[1]

(3) their donors and supporters

The importance of tax, and the tax cost of ignoring tax law, will be obvious to all our readers. It is the duty of charity trustees – and their professional advisers – to ensure that a charity's tax affairs are properly managed.

The years 2015-2017 in review

Etienne Wong has joined the team of authors taking on responsibility for VAT.

The last edition was only two years ago, but the changes affecting charities in that time have been substantial.

The FA 2016 has rewritten the rules for loans from close companies to charity trustee participators and introduced intermediary rules for Gift Aid. The Charities (Protection and Social Investment) Act allows the Charity Commission to disqualify a trustee who HMRC decide is not a "fit and proper" person.

The courts have decided important new case law, including Routier v HMRC (IHT relief for Jersey charity); Mountstar v Charity Commission (charity tax avoidance); Children's Investment Fund Foundation v AG (transfer between charities on divorce). On VAT, the Court of Appeal has delivered the watershed judgment on the meaning of "business": Longridge on the Thames. There is also new and developing case law on the exemptions for cultural services (BFI), education (Open University, Brockenhurst College) and sport (EBU).

There have been significant revisions to the HMRC Guidance Note, as usual, and new guidance from the Charity Commission. Many other parts of the book have been rewritten in an attempt to analyse the problems more deeply and more clearly.


We are very grateful to Robert Venables QC, joint author of the first two editions of this book, for enjoyable discussions on many aspects of tax, and to Setu Kamal, Harriet Brown and Oliver Marre, co-authors of previous editions. Yakshini Peerthum as research assistant resolved many puzzles . We owe a great debt to Jane Hunt and Ruth Shaw who work patiently on an intractable text throughout the year.

... and request for help

Comments from readers would be of the greatest value and interest to the authors. The pleasure in writing this book consists in the interest of the questions which it raises and the success which it may have achieved in answering them.

We have tried to state the law as at 1 September 2017.

James Kessler QC

Etienne Wong

Mary Ashley

15 Old Square

Lincoln's Inn

London WC2A 3UE


Further advice

If you want advice on which you are legally entitled to rely you can obtain it - but not from this work.

In particular you may instruct either of the authors to advise. We enjoy writing, but spend most of our time giving independent specialist professional advice, including, in particular, advice on the taxation of charities. For further details see

In cases where a charity which we wish to support cannot be expected to pay a commercial fee, we will consider acting for less than a commercial fee or pro bono. If a matter is not suitable, for reasons of cost or any other reasons, we will give recommendations.

Taxation of Charities Online

ToC Online is an online version of Taxation of Charities, and more. It can be used:

(1) to search the text of this book or to access it online.

(2) to see if the book has been updated.

(3) to correct or contribute to the book.

ToC Online is available as a free service to individuals and firms who have purchased the current edition of this book.

To access ToC Online, go to The authorisation code is in the inside cover of this volume, and is valid until publication of the next edition.


The views contained in this book are put forward for consideration and are not to be relied upon. Neither the authors nor the publisher accept any responsibility for any loss to any person arising as a result of any action taken or refrained from in reliance on this work.

Edition history

1st Edition 1989 Robert Venables QC & James Kessler

2nd Edition 1994 James Kessler

3rd Edition 2000 James Kessler

4th Edition 2003 James Kessler

5th Edition 2005 James Kessler QC

6th Edition 2007 James Kessler QC & Setu Kamal

7th Edition 2009 James Kessler QC & Harriet Brown

8th Edition 2011 James Kessler QC & Harriet Brown

9th Edition 2013 James Kessler QC & Oliver Marre

10th Edition 2015 James Kessler QC & Oliver Marre

11th Edition 2017 James Kessler QC, Etienne Wong & Mary Ashley

This work was entitled "Tax Planning and Fundraising for Charities" for the first three editions, "Taxation of Charities" for the next four editions, and renamed "Taxation of Charities and Non profit Organisations" in the 8th edition.
  1. A note on terminology: The term "not for profit entity" is sometimes used. "Public benefit entity" has the same meaning; though it is more formally defined in FRS 100 as "an entity whose primary objective is to provide goods or services for the general public, community or social benefit and where any equity is provided with a view to supporting the entity's primary objectives rather than with a view to providing a financial return to equity providers, shareholders or members."