How to successfully register your charity

Before starting, it is worth considering which charities are obliged to register and what the benefits of being a registered charity are.

 

Quite simply, if your company has a gross annual income of more than £5,000 then you are obliged to register it as a charity in the following financial year.

 

In addition, if you want to form a type of charity called a Charitable Incorporated Organisation (CIO) then it must be registered, regardless of its income.

 

The benefits of registration are easy to understand. As a registered charity your organisation will find it simpler to obtain grants, because some sources of funding are only able to give to registered charities.

 

Registration also gives your charity a level of credibility and legitimacy in the eyes of potential donors. That’s because they can be reassured that your charity is being scrutinised and regulated by the Charity Commission and, in some cases, by Companies House as well.

 

But, perhaps most importantly, registration entitles your charity to tax relief, reduced business rates, and the ability to reclaim tax on donations through Gift Aid.

 

 

Types of charities

 

Once you decide to register your charity, you will have to choose the type of charity you want to register it as. The options for charity structures are:

• Association CIO – these have limited ability to borrow, no minimum income, and members of the association have voting rights
• Foundation CIO – like above, but there are no voting members
• Charitable Company – these have no borrowing limitations, must have a minimum income of £5000, and are regulated both by the Charities Commission and Companies House
• Charitable Trust – they have a minimum income of £5000 and trustees do not enjoy limited liability

TIP: Charitable Trusts are rarely chosen nowadays.

 

The Charity Commission provides guidance on how to choose the right charity structure

 

 

How to get started

 

To register your charity with the Charity Commission you will need to complete an online application form. The Commission provides guidance on many of the steps you will need to take to complete it.

 

As an existing charity your organisation should already have a constitution or other governing documents, and you should expect that these will have to be modified in order to comply with Charity Commission’s requirements.

 

The Charity Commission offers model governing documents for all the types of registered charities listed above as well as  guidance on How to write your charity’s governing document

 

 

Stating your charity’s objects

 

It is important to examine your charity’s objects carefully as these are key parts of the governing document.

 

The Charity Commission provides example charitable objects that you can use to adapt your existing objects to ensure that they are not too vague or wide reaching to be acceptable.

 

If any of the examples describe your charity’s aims, then it may be worth copying the example into your governing document to replace the existing one. That way you can be sure that it will be acceptable.

 

You can also look at the objects of similar charities to your own using the Charity Commission’s Register of Charities and use these as a guide to what is likely to be accepted.

 

In general, your objects need to state

• What your charity seeks to achieve
• How it will achieve this
• Who will benefit
• Where the charity’s services will be provided

TIP: It’s a good idea to keep your objects to a minimum. You can have more than one, but the more there are the more information will be required and the greater the likelihood that the Charity Commission will reject your application for registration.

 

 

Trustees

 

Before registering, all your charity’s committee members have to sign a declaration that they are not barred from acting as a charity trustee. A full list of disqualifications is available on the Charity Commission website.

 

 

Submitting the application

 

You can submit your application at the Commission’s website, and there is no cost involved. It is important to check all the documents thoroughly because there is no way to change them once they have been submitted. It is a good idea to download a copy of your application when you submit it in case you need to refer to it later.

 

 

Once you have submitted

 

You will receive an email with a PDF of your application, which is useful for when you register your charity with HMRC. You need to register with HMRC in order to benefit from the various types of tax relief available to registered charities, including Gift Aid.

 

You can expect some response from the Charity Commission within roughly thirty days, although this can be as little as a day and as much as a few months. The response will very likely ask for more information or highlight areas that are unacceptable, such as an object that is too vague.

 

If you are not sure what response is required then it can be useful to ask what specific changes it would like to see in order to gain its approval.

 

Eventually, touch wood, you will be issued with a registration number. Congratulations – your organisation is now a registered charity.

 

 

What to do if your registration is refused

 

If you think the decision is wrong, you can ask the Charity Commission to reconsider. If this does not produce an acceptable outcome you can ask for a decision review.

 

You can also go to the Charity Tribunal (also known as the First Tier Tribunal) which can direct the Charity Commission to act in certain ways. For more information it is worth looking at the Tribunal guidance.

 

Finally, if you need more advice or help you can ask the Charity Tribunal Staff, the Information Commissioner’s Office or the Parliamentary Ombudsman for help.