Chapter 2 - Applications for Charitable Status

Contents

2.1 What is a charity?

2.1.1 A charity is defined in the Taxes Act as “any body of persons or trust established for charitable purposes only”. A 'body of persons' includes companies, unincorporated associations and other groups. The word 'established' has been held by the Courts to mean established in the United Kingdom. Charitable organisations established outside the UK cannot take advantage of Gift Aid and the other giving schemes and reliefs.

2.1.2 Further details on the charitable tax exemptions can be found in Annex I of these Guidance Notes.

2.1.3 In order that a charity can take advantage of Gift Aid and the other giving schemes, and so that it can make claims for repayment of tax, it must notify HM Revenue & Customs (HMRC) Charities of its existence so that the appropriate records can be set up.

Top

2.2 Charities in England and Wales

2.2.1 The Charity Commission has responsibility for the regulation of charities in England and Wales that are required to be registered under the Charities Act 1993 (as amended by the Charities Act 2006).

2.2.2 If a body is required to register with the Charity Commission, application should be made to them before contacting HMRC Charities. The telephone number for the Charity Commission is Tel 0845 300 0218 or you can visit the Charity Commission website. The Charity Commission can also advise whether a body is required to register with them.

2.2.3 Once a charity is registered with the Charity Commission it can apply for recognition as a charity for tax purposes. A written application should be made enclosing the following details:

  • The Charity Commission register number.
  • The full address, including postcode, for correspondence.
  • The names of the trustees.
  • The date to which accounts will be prepared.

Top

2.3 Bodies in England and Wales exempt or excepted from Charity Commission registration and charities in Northern Ireland.

2.3.1 All charities in Northern Ireland and those charities established in England and Wales that are not required to register with the Charity Commission should apply directly to HMRC Charities for recognition as a charity for tax purposes. The address is:

HMRC Charities
St John's House
Merton Road
BOOTLE
Merseyside
L75 1BB

2.3.2 To enable HMRC Charities to consider whether a body which is not registered with the Charity Commission is eligible to claim tax exemption, the body must provide the following information:

  • The signed and dated governing documents – this may be a Trust Deed, a will, a Memorandum of Association or a constitution.
  • The full name and postal address for correspondence.
  • Details of the proposed activities, along with copies of any literature that explains the work of the body.
  • The date to which accounts will be prepared (accounts should not be sent in support of the claim for charitable status. If a body is accepted as a charity, accounts will be requested together with a tax return only when needed).

2.3.3 HMRC Charities will, in the case of bodies that are not required to register with the Charity Commission and are seeking tax exemption, consider draft documentation and advise whether the body is capable of being a charity.

2.3.4 If HMRC Charities is satisfied that a body is established for wholly charitable purposes we will:

  • allocate a charity tax reference number for use on all correspondence and claims
  • write and advise you of our decision and your charity tax reference
  • provide you with Gift Aid claim forms.

2.3.5 If HMRC Charities is not satisfied that a body is established for charitable purposes only we will write to you and explain our decision and arrange for a tax record to be created at the appropriate office.

Top

2.4 Charities in Scotland

2.4.1 The Office of the Scottish Charity Regulator (OSCR) has responsibility for the regulation of charities in Scotland. All bodies wishing to act as charities in Scotland must register with OSCR.

2.4.2 Application to OSCR for inclusion on the Scottish Charity Register should be made before contacting HMRC Charities. The telephone number for OSCR is Tel 01382 220 446 or you can visit the OSCR website.

2.4.3 Once a charity is registered with OSCR it can apply for recognition as a charity for tax purposes. A written application should be made enclosing the following details:

  • The Scottish Charity Register number.
  • The full address, including postcode, for correspondence.
  • The names of the trustees.
  • The date to which accounts will be prepared.

2.4.4 In the vast majority of cases entry into the Scottish Charity Register will entitle a body to the charity tax reliefs, however, charitable purposes in Scottish Law are not exactly the same as charitable purposes for tax. If it appears to OSCR that aspects of a charity’s governing document may not satisfy the requirements of HMRC they will advise HMRC and the charity trustees of this.

2.4.5 HMRC will consider all applications from Scottish Charities and may sometimes need to request additional information from the trustees in order to reach a decision. A Scottish Charity should not assume that registration with OSCR will guarantee an entitlement to the charity tax reliefs and should make its application to HMRC as soon as possible after registration by OSCR.

2.4.6 If HMRC Charities is satisfied that a body is established for wholly charitable purposes we will:

  • allocate a charity tax reference number for use on all correspondence and claims
  • write and advise you of our decision and your charity tax reference
  • provide you with Gift Aid claim forms

2.4.7 If HMRC Charities is not satisfied that a body is established for charitable purposes only we will write to you and explain our decision and arrange for a tax record to be created at the appropriate office.

Top

2.5 Bodies denied entry on the Scottish Charity Register

2.5.1 Because of the different requirements of OSCR and HMRC it is possible that a body denied entry on the Scottish Charity Register may be entitled to the charity tax reliefs.

2.5.2 To enable HMRC Charities to consider whether a body can be recognised as a charity for tax purposes, the following information and documents are needed:

  • A copy of the letter from OSCR explaining why registration has been denied.
  • The full address, including the post code, to which all communications should be sent.
  • Copies of the body’s governing documents (Trust deed, will, Memorandum of Association or constitution).
  • Details of the proposed activities, along with copies of any literature that explains the work of the body.
  • The date to which accounts will be prepared. You do not need to send accounts with the application - if the body is recognised as a charity for tax purposes, accounts will be requested with a tax return only when needed.

2.5.3 If HMRC Charities is satisfied that a body is established for wholly charitable purposes we will:

  • allocate a charity tax reference number for use on all correspondence and claims
  • write and advise you of our decision and your charity tax reference
  • provide you with Gift Aid claim forms

2.5.4 If HMRC Charities is not satisfied that a body is established for charitable purposes only we will write to you and explain our decision and arrange for a tax record to be created at the appropriate office.

Top

2.6 Other information

2.6.1 If the charity changes its name the trustees should notify HMRC Charities as soon as possible. If the charity is a company it should include a copy of the Certificate of Incorporation of Change of Name. If the charity is not a company it should include the Minutes of the meeting of the trustees at which the name change was adopted.

2.6.2 If you have any further questions about charitable status you should telephone the HMRC Charities helpline and select Option 2.