A charity, or charitable organisation, must be a non-profit operation. The main objectives of charities, as an NPO, involve activities that serve the public interest or a common good.
The laws and regulations of charities in United Kingdom vary. Even so, the funds of charitable organisations must not profit entities or any individual persons.
In order to meet the legal definition of a charity, it needs to meet certain rules and regulations. As such, all charities registered in the United Kingdom must:
Most charities will register with the Charity Commission. Thus, they need to state what their charitable objectives are and use annual reports to explain how they are meeting them.
Note: The annual reports issued by registered charities are available for public viewing in the United Kingdom.
According to the laws of charitable organisations, the term 'public benefit' means the charity must:
The Charity Commission decides whether an organisation passes the test of meeting 'public benefit' or not. The commission uses its own guidance and previous case laws as part of its decision making.
Note: This section focuses on charity rules and regulations in England and Wales. Some variances may apply to charity law elsewhere around the United Kingdom.
Most 'recognised' charities will qualify for certain types of charity tax exemptions and reliefs. The business section explains the treatment of charities and taxation by HMRC in the United Kingdom.
As an individual, you may qualify for tax relief when you donate to a charity in the UK. Tax relief on charity donations can occur through schemes like Gift Aid, Payroll Giving, or when gifted in a will.
Note: You can search the charities register to find details and information about the registered charities in England and Wales.
There is a set procedure to complain about a charity or to report them for misconduct. You can also file a complaint to the regulator if the charity fails to deal with the situation 'appropriately'.
There are certain conditions to meet before claiming Gift Aid as a charity or a CASC. The section explains what Gift Aid is and how to claim this type of tax incentive in the United Kingdom.
Note: You can also make a donation to support members through the armed forces charities (e.g. Army, Armed Forces Day, Navy, RAF, Royal Marines, Operations Welfare Fund).
You can prepare the right annual accounts for the structure and income of your charity online. Different guidance applies to charities that are exempt (not regulated by the Charity Commission).
UK law requires you to keep your charity details up to date with several government organisations. Thus, reporting changes to your charity's details is an important part of running one.
Note: You can change the details of your charity (e.g. its name, bank details, or the governing document) with the Charity Commission online.
Even though setting up a charity has its advantages, it may not be right for your organisation. The guide will help you to determine whether becoming a charitable foundation it is the best option.
Charities need authorised officials and responsible persons to manage tax with HMRC. Part of running your charity's finances involves choosing 'fit' people to manage and control it.
Note: As a charity, you will be exempt from paying VAT when buying certain types of goods and services. Find out more in a section explaining how VAT affects charities in the United Kingdom.
Registered Charity Regulations in United Kingdom