The Complete UK Charity Guide

Your comprehensive resource for setting up and managing a UK charity. From registration to compliance, find expert guidance for trustees and charity administrators.

£5,000

Min. Registration

10 Months

File Accounts

£25k

SORP Threshold

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1

Setting Up a Charity

How to register and establish your UK charity

When to Register with the Charity Commission

In the UK, your organisation must register with the Charity Commission if:

  • Your charity's annual income is over £5,000
  • It's a Charitable Incorporated Organisation (CIO)
  • It's a charitable company (registered with Companies House)

Charities with income under £5,000 are not required to register but can do so voluntarily. Unincorporated associations like sports clubs can register as charities if they have charitable purposes.

Choosing Your Charity Structure

There are several charity structures to choose from, each with different advantages:

Unincorporated Association

Simplest structure. Suitable for small charities with few assets. Trustees have unlimited liability.

CIO (Charitable Incorporated Organisation)

Separate legal entity, limited liability for trustees. Registered with Charity Commission only.

Charitable Company

Limited by guarantee. Registered with both Companies House and Charity Commission.

Charitable Trust

Suitable for endowments and foundations. Trustees hold property on trust for charitable purposes.

Required Documents

To register your charity, you'll need:

  • Governing Document - Constitution, memorandum & articles, or trust deed
  • Charitable Purposes - Clear statement of what your charity aims to do
  • Trustee Details - Names, addresses, and dates of birth for all trustees
  • Financial Projections - Expected income and spending for the first year

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2

Trustee Responsibilities

Understanding your duties as a charity trustee

Who Can Be a Trustee?

Trustees must be:

  • At least 16 years old
  • Of sound mind
  • Not disqualified (e.g., bankruptcy, certain convictions)
  • Willing to act in the charity's best interests

Core Trustee Duties

Ensure Purpose

Ensure your charity carries out its stated purposes for the public benefit.

Financial Oversight

Ensure proper financial management and controls are in place.

Manage Staff

Responsibly appoint and manage staff and volunteers.

Risk Management

Identify and manage risks to the charity.

Trustee Meetings

Trustees must hold regular meetings (at least once every quarter) to:

  • Review financial performance and budgets
  • Make key decisions about charity activities
  • Ensure compliance with legal requirements
  • Plan for the future of the charity

All decisions should be documented in meeting minutes, which must be kept as official records.

Trustee Training Available

We offer trustee training to help your board understand their responsibilities.

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3

Annual Accounts

Preparing and filing your charity accounts

Types of Accounts Required

Your charity's income determines the type of accounts you must prepare:

Income Accounts Type Requirement
Under £10,000 Receipts & Payments No examination required
£10,000 - £25,000 Receipts & Payments Independent examination recommended
£25,000 - £1 million Accruals (FRS 102) Independent examination required
Over £1 million Accruals (FRS 102) Full audit required

FRS 102 and the Charities SORP

Charities with income over £25,000 must prepare their accounts using:

  • FRS 102 - The UK accounting standard for smaller entities
  • Charities SORP - Statement of Recommended Practice for charities

These ensure consistency and transparency in charity financial reporting.

Filing Deadlines

Charities must file their annual accounts with the Charity Commission within 10 months of their financial year-end. Late filing can result in penalties and regulatory action.

Expert Account Preparation

We prepare charity accounts to FRS 102 and SORP standards.

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4

Tax & VAT

Understanding charity tax obligations

Corporation Tax Exemption

Charities are generally exempt from Corporation Tax on income that is:

  • Used for charitable purposes only
  • Donations and gifts
  • Interest and royalties received
  • Property income used for charitable purposes

However, tax may be payable on trading income that is not directly related to the charity's charitable purposes.

Gift Aid

Gift Aid is one of the most valuable tax reliefs for charities. When a UK taxpayer donates to your charity:

  • You claim 25p for every £1 donated
  • It costs the donor nothing extra
  • Higher rate taxpayers can claim the difference

Make sure donors complete a Gift Aid declaration for each donation.

VAT for Charities

Charities do not get special VAT treatment but can:

  • Register for VAT if VATable supplies exceed £85,000
  • Reclaim VAT on certain supplies under the VAT Refund Scheme
  • Use zero-rating on specific goods (e.g., drugs for disabled people)

Tax Planning Support

We can help maximise your charity's tax reliefs and ensure compliance.

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5

Compliance & Regulation

Staying compliant with Charity Commission requirements

The Charity Commission

The Charity Commission is the regulator for charities in England and Wales. Their role includes:

  • Registering new charities
  • Monitoring charity compliance
  • Investigating serious concerns
  • Providing guidance and support

Annual Return

All registered charities must file an Annual Return each year, which includes:

  • Updated trustee details
  • Financial summary
  • Governing document changes
  • Charitable activities update

The Annual Return must be filed within 10 months of your financial year-end.

Independent Examination vs Audit

Independent Examination

For charities with income £25,000 - £1 million. Less extensive than an audit. Examiner reviews accounts and vouches material items.

Full Audit

For charities over £1 million income. Comprehensive examination of financial controls and transactions. Required by law in these cases.

Common Compliance Issues

Avoid these frequent problems:

  • Filing accounts late
  • Not keeping adequate records
  • Using funds for non-charitable purposes
  • Conflicts of interest not declared
  • Changes not reported to Charity Commission

Compliance Support

We can help ensure your charity stays compliant with all regulations.

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6

Payroll & Employment

Managing staff and meeting employment obligations

PAYE Requirements

If your charity pays employees or contractors, you must operate PAYE as part of your payroll. This includes:

  • Registering as an employer with HMRC
  • Deducting income tax and National Insurance
  • Submitting Real Time Information (RTI) every pay period
  • Reporting benefits and expenses

Auto Enrolment

All UK employers must automatically enrol eligible workers into a workplace pension. This applies to charities too. You must:

  • Assess which workers are eligible
  • Set up a qualifying workplace pension scheme
  • Enrol eligible workers
  • Make employer contributions
  • Complete ongoing assessments

Trustee Remuneration

Trustees generally cannot be paid for their role as trustee. However, exceptions exist:

  • Payment for services outside their trustee duties
  • Reimbursement for out-of-pocket expenses
  • Specific provisions in the governing document
  • Charity Commission approval in certain cases

Always seek professional advice before paying trustees.

Payroll Services

We provide comprehensive payroll services for charities including RTI and Auto Enrolment.

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Need More Help?

Our expert team is here to help with any aspect of charity management. Get professional advice tailored to your organisation.

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