Not for Profit eNews - February 2025

As we progress through 2025, charities continue to navigate an evolving regulatory and financial landscape. This edition of MHA’s Not-for-Profit eNews provides insights into some of the most pressing developments affecting the sector, from governance reforms to investment management and compliance challenges.

We begin by examining the emerging trends in charity service delivery for 2025. With demand for services continuing to rise and financial constraints limiting resources, charities are turning to artificial intelligence, collaborative working, and structured beneficiary feedback mechanisms to enhance operational efficiency. Additionally, there is a growing emphasis on centring service users in decision-making to ensure that services are more inclusive and tailored to beneficiaries’ needs.

Investment governance remains a crucial topic, and we explore the new Charity Investment Governance Principles (CIGPs), introduced to help trustees navigate financial decision-making while aligning investments with charitable objectives. We also highlight updates on withholding tax on investment income, ensuring charities understand their tax relief entitlements and the processes for reclaiming overpaid tax.

In the area of financial compliance, we discuss HMRC’s renewed focus on VAT regulations, particularly regarding the classification of business and non-business activities. With increased scrutiny from tax authorities, charities must ensure they meet VAT obligations to avoid financial penalties.

With these developments shaping the sector, staying informed and proactive is essential. We hope this edition provides valuable insights and practical steps to help charities remain compliant and financially sustainable in the year ahead.