The UK Rules
Running Charity Finances

Who Can Run a Charity's Finances

Part of running your charity's finances includes choosing the right people to manage and control it. Charities will need authorised officials and responsible persons to manage tax with HM Revenue and Customs (HMRC).

Charity managers will need to meet conditions of the 'fit and proper persons' test. This guide also explains how to appoint someone outside your charity (e.g. a nominee) to manage a charity's tax affairs.

Getting Recognition of a Charity or CASC

When applying for recognition of a charity or a community amateur sports club (CASC) for tax purposes, you need to:

These appointments must occur before a charity can qualify for tax relief.

Note: HM Revenue and Customs (HMRC) will only deal with the authorised official about matters that relate to charities and tax.

Who is 'Fit' to Run a Charity?

A 'fit and proper persons test' is used to prove all the managers dealing with finances are fit to run the charity or CASC. Thus, you would need to prove that the authorised officials and responsible persons are capable of running your charity's finances.

You achieve this by asking them to sign a declaration. HMRC produce a 'fit and proper persons' model declaration for managers of charities and Community Amateur Sports Clubs when claiming tax relief.

There is no need to send the declaration to HM Revenue and Customs unless they ask for it. But, you should keep it in your records while the person is working for the charity and for another four (4) years if they leave the post.

Failing the 'Fit and Proper Person Test'

In some cases, you may want someone to run your charity's finances even if a previous event stops them from signing the declaration. In this case, you must tell HM Revenue and Customs (HMRC) about the situation.

Note: HMRC will not hold your charitable organisation responsible if they find someone unsuitable of running a charity - providing you carried out the test.

Making Appointments Outside the Charity

You can appoint a nominee (someone outside your charity) to claim back tax from HM Revenue and Customs on your behalf. Even so, you must still appoint an authorised official within the charity who will be responsible for taxation.

Thus, you can appoint someone to deal with HMRC on your behalf if:

It is not uncommon for nominees to claim Gift Aid on behalf of charities. A 'collection agency' would handle this type of agreement.

Related Guides:

How to set up a charity
Registering as a community amateur sports club (CASC)
Send a query to HM Revenue and Customs

Changing Authorised Officials or Responsible Persons

What if the authorised officials or responsible persons change? In this case, you should fill in Form ChV1 to notify HMRC.

Note: You can save the form to a computer and complete the details on screen. Print off the document, sign it, and mail it to the address written on ChV1 form.


Who Can Run Charity Finances in United Kingdom

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