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How to register as a tax-free charity in the UK

Overview

Register an organisation as a charity and you gain tax advantages. The rules governing how to register are complex. Your organisation counts as a charity if you can show it was set up to benefit the public. This might be by relieving hardship, advancing education or religion, or by some other altruistic means. Registered charities are usually free of income, capital gains, or inheritance taxes and do not have to pay stamp duty. They can also gain relief on VAT.

Charity regulator

Contact the Charity Commission if your organisation is based in England or Wales. Approach the Office of the Scottish Charity Regulator to register a charity north of the border. A Charity Commission for Northern Ireland exists, but as of 2012 had not yet started its own registration scheme. The website of each organisation gives detailed guidance on registration.

Eligibility

Your organisation is eligible to register as a charity if you can demonstrate it provides a clear public benefit and is not run for profit. As of 2012 in England and Wales, only organisations with an annual income of more than £5,000 were considered eligible.

Advice

Seek advice at an early stage of setting up your charity. Charity regulators and the Charity Information Bureau (CiB) both provide briefing materials and examples for you to consult. Contact other charitable organisations in your field to get the benefit of their experience too.

Name

Before registering a charity, you must choose a name for it. The Directgov website suggests you choose something "individual, memorable and easy to say." You must ensure the name is not the same as, or too-similar to, that of another charity. The regulators' websites have search boxes to let you quickly check the name you favour.

Trustees

Appoint trustees, volunteers to take responsibility for the new charity. Trustees must be prepared to answer under the law for any financial irregularities in the organisation or any crime committed by someone acting for the charity. Trustees may also face civil law challenges over matters such as leases, contracts, or other claims made against the organisation.

Governing document

Trustees must agree a governing document, explaining how the charity is organised, how it will carry out its work and how it will achieve its aims. There are different types of governing document. Yours may be a constitution, a trust deed, or a memorandum and articles of association. The CiB's website provides guidance on which type to choose.

Registration

Fill in the application form provided by the charity regulator. Each trustee must sign a declaration in support of your application. Supply evidence to show proof of income and how your charity benefits the public, such as a case study about a successful project. Include a copy of your organisation's governing document with your application.

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