HMRC has begun rolling out a programme of Structured Risk Reviews (SRRs) across the charity and not-for-profit sectors. This marks a more coordinated approach to compliance, drawing together information across all taxes to build a detailed picture of how organisations operate and identifying any areas of potential underpayment or non-compliance. 

Recent correspondence received by several charities indicates that SRRs are being led by HMRC’s Wealthy and Mid-Sized Business Compliance (WMBC) unit and are overseen by a Customer Compliance Manager (CCM). The SRR process can be extensive, covering Corporation Tax, Gift Aid, VAT, and Employment Taxes, as well as governance, internal controls and how charitable funds are managed.  

How are organisations selected for an SRR?  

HMRC has not publicly released its selection criteria, but early evidence suggests that reviews are informed by data from “Connect”, HMRC’s sophisticated data analytics platform. Connect aggregates data sources such as tax filings, Companies House, Charity Commission returns, banking data, and even open-source information such as websites and social media.  

The system identifies inconsistencies or risks, for example:  

• Mismatches between tax returns and publicly available accounts. 

• Incorrect data entry in corporation tax or VAT returns. 

• Complex income structures or overseas transactions. 

• Large volumes of repayment claims (e.g. for Gift Aid or VAT recovery). 

What to expect during a Structured Risk Review  

An SRR usually starts with a letter from the assigned Customer Compliance Manager. HMRC will outline the review scope, which often includes:  

• Corporation Tax and charitable expenditure. 

• Gift Aid administration and record-keeping. 

• VAT registration, exemptions and partial exemption methods.