Fit and Proper Persons Test UK: Charity Guide
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If you manage a charity, a Community Amateur Sports Club, or any body that claims UK charity tax reliefs, HMRC expects you to satisfy what is called the fit and proper persons test. The rule is straightforward in principle but trips up plenty of well-meaning trustees in practice.
It applies to anyone with meaningful control over the organisation's money or decisions, and getting it wrong can put tax reliefs at risk for the entire body. This page walks through who counts as a manager, what HMRC actually looks at, and how the model declaration is typically used.
It is written for trustees, directors, CASC officials and committee members who want a plain-English picture of their obligations before signing anything or accepting a position. Treat it as a starting point for understanding the framework, not as a substitute for tailored guidance on your particular circumstances.
Overview
The fit and proper persons test is a statutory condition built into the rules that allow charities and CASCs to claim UK tax reliefs such as Gift Aid. In short, HMRC needs to be satisfied that the people running the organisation will use its funds and reliefs only for genuine charitable purposes, not for tax avoidance or personal gain.
The test sits alongside the wider duties trustees already owe under charity law, but it is specifically about protecting the tax system from abuse. Every manager is presumed to be fit and proper unless something in their background suggests otherwise.
HMRC publishes a model declaration that organisations can ask each manager to sign, confirming they understand the standard and disclosing anything relevant. The declaration is not a legal requirement in itself, but using it gives the organisation a sensible audit trail and protects the body if a manager later turns out to have undisclosed issues.
Failing the test does not always mean losing reliefs, but it does mean HMRC will look more closely at how the organisation operates.
Key steps
- Work out who counts as a manager. The definition is broader than people often think. It captures trustees, directors of corporate charities, directors of corporate trustees, CASC officers, and anyone else who has general control or management over the organisation, its funds, or its assets. Job titles do not matter. What matters is real influence over decisions and money.
- Read HMRC's guidance and the model declaration. Before asking anyone to sign, the board should familiarise itself with HMRC's published guidance and the wording of the model declaration. This makes sure each manager understands what they are confirming and what kinds of past events or current circumstances need to be disclosed rather than glossed over.
- Ask each manager to complete the declaration honestly. Each individual should consider their own history carefully, including any tax fraud findings, designation under terrorist financing rules, disqualification as a trustee or director, or involvement in tax avoidance schemes. Honesty here protects both the manager and the organisation if HMRC ever asks questions.
- Keep the signed declarations on file. Store completed declarations securely with the organisation's governance records. If HMRC carries out a compliance check, being able to produce signed declarations promptly demonstrates that the body has taken its obligations seriously and applied a consistent process to every appointment.
- Refresh the position when circumstances change. The test is not a one-off exercise. New trustees joining the board should complete a declaration on appointment, and existing managers should update theirs if anything material changes. Periodic reminders at board meetings help keep the obligation visible rather than forgotten.
Common questions
If you're dealing with this kind of situation, a call with an experienced legal adviser can help you work out the right next step — from £149.
Common questions
Q Who needs to sign a fit and proper persons declaration?
Anyone who counts as a manager of the charity or CASC should sign. That typically includes all trustees, directors of corporate charities, directors of any corporate trustee, CASC officers, and anyone else with general control over the organisation's funds or operations. The test focuses on real influence rather than job titles, so committee members with decision-making power are usually included even if they are not formally trustees.
Q Is the declaration legally required by HMRC?
HMRC does not require organisations to use its model declaration, but the underlying fit and proper persons test is a statutory condition for claiming charity tax reliefs. Using the model declaration is a practical way to evidence that managers understand the standard and have disclosed anything relevant. Without something equivalent on file, the organisation may struggle to show it took reasonable steps if HMRC later asks.
Q What sorts of issues might make someone fail the test?
HMRC looks at matters such as past involvement in tax fraud or tax avoidance, disqualification as a company director or charity trustee, designation under anti-terrorism financing rules, and findings of serious misconduct in financial roles. The list is not exhaustive. The underlying question is whether the person can be trusted to ensure the organisation's funds and reliefs are used only for charitable purposes.
Q Does failing the test mean the charity loses its tax reliefs?
Not automatically. HMRC has discretion and will consider the seriousness of the issue, whether the person has been removed, and what safeguards the organisation has in place. In some cases reliefs may be allowed to continue if the body acts promptly. In more serious cases, claims may be denied or clawed back. Early engagement with HMRC and proper records usually help.
Q How often should declarations be updated?
There is no fixed timetable in the legislation, but good practice is to obtain a declaration from every new manager on appointment and remind existing managers to update theirs whenever something material changes. Some boards build a periodic refresh into their annual governance cycle, which keeps the topic visible and reduces the risk of disclosures being forgotten over time.
Q Does the test apply to small local charities?
Yes. The fit and proper persons test applies to any body claiming UK charity tax reliefs, regardless of size or income. Small community charities and local sports clubs are within scope just as much as national organisations. The level of formality can be proportionate, but the underlying duty to ensure managers are suitable is the same across the board.
Q What should we do if a manager refuses to sign?
A refusal is a serious red flag and the board should treat it as such. The first step is usually to discuss the concern openly and understand the reason. If the person still will not sign, the trustees need to consider whether it is appropriate for them to continue in a role that gives them control over charitable funds. Taking guidance before acting is sensible.
If you're dealing with this kind of situation, a call with an experienced legal adviser can help you work out the right next step — from £149.
Sources
This guide is based on primary UK law and official guidance.
- Guidance · UK GovHMRC: Charities and the fit and proper persons testgov.uk
- Guidance · UK GovHMRC: Charity tax reliefs guidancegov.uk
- Guidance · UK GovCharity Commission for England and Walesgov.uk
Legal helpline
Unsure whether your board meets the test?
The fit and proper persons rules can feel vague when you are weighing up a real situation, such as a new trustee with a complicated history or a past issue you are not sure how to handle. An experienced legal adviser can help you think through what HMRC's framework means for your circumstances based on what you describe on the call.
- A clear explanation of how the test applies to what you describe
- Practical perspective on disclosures and red flags in your situation
- Plain-English answers to your specific questions about manager duties
- Help thinking through your next steps before signing or appointing
Legal disclaimer
This article is for general information only. It is a tool to help you find your way — not legal advice, and not a substitute for speaking to a qualified adviser about your situation.