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guide to charitable status

about this guide

HMRC registration

Charities and governing bodies

England and Wales

Scotland

Northern Ireland

about this guide

At Envelope Systems, we are often asked about charities registration, regulatory bodies and the meaning of the various numbers issued.

Here we unravel the mysteries for you with a brief background to the role of these regulators.

As well as being of general background interest, this guide is also intended to help with decisions on envelope wordings and setting up accounts with our sister company, Fund Filer.

We try to keep this information up to date but don’t guarantee to do so as legislation is constantly under review. Always consult the relevant governing bodies for detailed and up to date guidance.

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What types of registration are there?

There are two types:

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HMRC registration 'the tax one'

This registration relates to a charity’s tax affairs. Although an HMRC number can be used to demonstrate charitable status, for simplicity it’s easiest to regard this registration as ‘the tax one’.

Any organisation wishing to take part in the Gift Aid scheme must first register with HMRC by completing form ChA1. This form and further information on HMRC registration can be found on the HMRC website via this link.  Once registered, a charity is issued with an HMRC number.

HMRC numbers

HMRC registration numbers generally begin with an X for charities in England and Wales, CR for Scottish charities or CH for those in Northern Ireland.

These numbers identify a charity to HMRC and are therefore always included in Gift Aid repayment claim submissions, along with charity name.

These details are also therefore required as part of the initial set up on Fund Filer and would be required in any communications a charity makes with HMRC in connection with its tax affairs.

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Charity registration 'the status one'

This registration relates to establishing charitable status. Charities across the UK are regulated to ensure correct and proper standards of operation and to prevent misuse of the status. This is not connected with tax or Gift Aid.

Registration with a regulatory body such as the Charities Commission is a legal requirement in many cases but by no means all. There are many exceptions and exemptions and these are described below. There are more than 500,000 voluntary organisations of various types in the UK, but fewer than half are formally registered as charities.

Organisations registered with their relevant governing bodies as charities should include a reference to this on any Gift Aid envelopes used for canvassing donations. Again, the rules vary depending on where the charity is located.

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England and Wales

The affairs of charities in England and Wales are governed by The Charities Commission, based in London: https://www.gov.uk/government/organisations/charity-commission. Charities fall into various broad categories as follows:

Implications for envelope wordings

Registered charities are required to indicate charitable status on stationery and any other material designed to canvass for donations, such as envelopes. Inclusion of name and registered charity number is not a legal requirement under charities legislation but would be considered good practice. Set forms of words specified by The Commission should also appear as follows:

Further detail is available via this link: https://www.gov.uk/topic/running-charity

Bear in mind that a charity name is required for declarations on Gift Aid envelopes in order for these to be valid for repayment claims. Declarations must bear the name of a beneficiary.

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Scotland

There are about 23,000 recognised charities in Scotland, including churches and many other types of voluntary organisation.

Scottish charitable affairs are governed by the Office for Scottish Charities Registration (OSCR), created in 2005 and based in Dundee. www.oscr.org.uk

In Scotland it is illegal for a charity to describe itself as such unless it is registered with OSCR. An OSCR number is also mandatory before obtaining HMRC registration to reclaim Gift Aid and enjoy other tax benefits.

Implications for envelope wordings

OSCR requires charities to show this status on stationery such as collection envelopes. Wording should include the following:

There is an exception to this for envelopes distributed by a church or charity to it’s own members, Freewill Offering envelopes for example. In these circumstances, the above information is not required.

Care should be taken as this information will be necessary on one-off Gift Aid envelopes intended for wider distribution. Guidance provided to us by the Church of Scotland when this legislation was introduced can be downloaded here. (download of scotcharities.pdf)

Also consult OSCR’s website www.oscr.org.uk for further information.

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Northern Ireland

Northern Ireland introduced its formal system for charities registration on 16 December 2013 via the relatively new Charities Commission for Northern Ireland, www.charitycommissionni.org.uk Full details on preparing for registration are available via this link: http://www.charitycommissionni.org.uk/start-up-a-charity.  All organisations that are or could be charitable are required to register, but this is being rolled out in tranches. Charities will be advised as their tranche is opened.

In the meantime, charitable status will continue to be conferred via inclusion on a ‘deemed list’ kept by HMRC comprising Northern Ireland charities registered with HMRC for Gift Aid or other charitable purposes. No special wordings need appear on stationery or envelopes at least for the time being for charities in this group.

We will update this site with news as the new scheme progresses, including any implications for envelope wordings once a charity is registered.

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