Charity Commission

The Charity Commission is the regulator and registrar of charities and philanthropies in England and Wales. The Commission is a self-governing government department which is answerable to parliament. The Commission is also accountable for the implementation of its quasi-judicial powers to the High Court and First-tier Tribunal (Charity). It is responsible for making a decisionwith regards toorganisations being termed as ‘charitable’ and whether it should be added or removed from the Register of charities. The Commission operates a clear officially authorised framework and works in-line with the published procedures and policies and procedures to make certain that it is impartial in its approach. As of 31 March 2016, there were total of 165,334 charities (in addition to 6,455 subsidiaries) and the Charity Commission regulated £70.93 billion charity income in FY2016.

The UK Parliament, through the Charities Act 2011, gives the Charity Commission five statutory objectives. The objectives are:

To increase public belief and assurance in charities
To promote understanding and awareness of the operation carried out, that are for the public benefit
To promote compliance by charity trustees with their legal obligations in exercising control and management of their charities
To promote effectual use of charitable resources
To augment the accountability of charities to beneficiaries, donors, and general public

As new charities registrar and regulator, the Charity Commission carries out quasi-judicial functions subsequent to the common law which govern charities. The Commission adopts an exact approach in exercising its powers, act proportionately and also provides reasons for its decisions. In case a law is dated, uncertain or vague, the Commission approaches the case in a similar manner as they think the courts would. The decisions of the Charity Commission can be appealed to the First-tier Tribunal (Charity) and also some of its decisions can be openly challenged in the HighCourt. The Charity Commission aims to focus on four strategic priorities:

Priority 1: Defend charities from abuseor unprofessional conduct
Priority 2: Enable trustees to run their charities efficiently
Priority 3: Encourage better transparency and accountability by charities
Priority 4: Operate as an efficient, specialist regulator with sustainable funding

Tasks performed by a Charity Commission

Registering a Charity: Take a decision on whether a charity meets the legal test for charitable status

The Charity Commission formally assesses all applications for registration on a scenario-by-scenario basis using its Risk framework. The Commission aims to protect faith and poise in a charity by restricting the registration of only those organisations that appropriately clear the legal tests. It has strengthened its approach of assessing whether applicants are indisputably charitable. The new approach is more rigorous and it is also making the process more streamlined to identify which organisations might raise governance or compliance concerns, though being charitable

Maintaining a Register of charities

The Commission aims to make certain that the Register of charities is correct and up-to-date.Its data is also used by many other charities and research organisations, and public bodies to derive analysis about the charity sector in England and Wales. For reasons of responsibility and simplicity, the Commission requires charities to provide key public information, at the appropriate time. Users can search for registered charities on the online portal and with their key information. It also highlights on the charities Register, the charities which fail to act in accordance withbasic information requirements - these include filing annual returns and accounts on time, charities with qualified accounts, and charities that are subject to a legal investigation

Giving permissions and consents

Sometimes it so happens that charities need permission to perform certain tasks such as disposing their property, making payment to the trustees, authorising large transactions in regards to land. The Commission has initiated work to make it more streamlined to get low risk permissions.For any significant changes, the trustees should consult with stakeholders or discuss with their advisor such as DNS Accountants before approaching the Charity Commission

Monitoring charities

Monitoring includes proactively working towards anticipated problems. Tasks may include desk-based research, interacting with or conducting interview with trustees, visiting the charity's premise and examining its books and records. This may result in providing the charities with regulatory recommendations, thereby ensuring that the advice is followed and an action plan is set-up

Governance structure

Governance Structure - Charity

Charity reporting and accounting: the essentials

There are different needs for different types of charity depending on their size and structure. To comprehend what applies to a charity, below mentioned are a few check-points:

Along with being a charity, whether or not, it is also a company (registered with both the Charity Commission and Companies House) or a charitable organisation only registered with the commission
Charity's income for the present financial year
Value of charity's assets
Depending on the size of a charity, is it mandatory to register a charity with the commission.

It is imperative to make certain that the charity’s trustees understand:

What type of accounts needs to be prepared
What information needs to be sent to the commission
What information is needed in the trustees' annual report
Whether the accounts need an independent examination or a statutory audit

Types of charity accounts

A charity has the option to prepare either accruals accounts or receipts &payments accounts. The type of charity account will depend on the income of the charity and whether it has been established as a charitable company or not

Accruals Accounts

Charities with gross income above £250,000 during the financial year can use this method. All charitable companies have to prepare accruals accounts that act in accordance with the applicable Statement of Recommended Practice (SORP). The SORP to be considered will depend upon the charity’s financial year. Accruals accounts contain a balance sheet, a detailed declaration (statement) of financial activities, and explanatory notes. These accounts are necessary in accountancy terms to show an ‘accurate and fair view’

Receipts and payments accounts

This is the easiest of the both the methods of accounts preparation. This method is used when a charity has a gross income of £250,000 or less during a financial year. Receipts and payments accounts contain a declaration summarising all the amount received and paid out by the charity in a financial year, and a declarationproviding details of its assets and liabilities at the end of a financial year

Sending a charity's annual return

For charities registered in England or Wales, it is a must to send their annual returns. This annual return is different from charity tax return.

If your income is under £10,000	Sending an annual return is not required if your charity's income is under £10,000. However, you must keep your details updated like income, expenditure, trustees and contact details.
If your income is over £10,000	send an annual return within 10 months of the end of your financial year keep your charity's details up to date

Charities in England and Wales – 31 March 2017

Total Number of charities:

Main charities	167,222
Linked charities	16,088
Total	183,310

Charitable spending

	£bn
Spending on income generation	9.23
Charitable spending	61.91
Retained	3.13

Income

	£bn
Voluntary income	22.79
Trading to raise funds	7.41
Investment income	4.03
Charitable activities income	38.37
Other	1.67
Total	74.27

Investment
gains

£8.44bn

Spending

	£bn
Generating voluntary income	2.83
Trading to raise funds	3.59
Investment management	0.67
Charitable expenditure	61.91
Governance	0.77
Other	1.37
Total	71.14

Total assets & liabilities

	£bn
Own use assets	79.90
Long term investments	133.55
Short term investments and cash	33.53
Other assets	12.76
Other liabilities	45.77
Pension fund asset/liability	-4.91

People

Trustees	951,119
Employees	1,584,801
Volunteers	3,521,958

Source: Charity Commission Website

Search the charity register

On charity commission website, now you can find information about registered charities in England and Wales such as:

name and address
trustees
work and aims
finances

Search Charity Now

Change your charity's details

It is important to keep all your charity details up-to-date. In case of any changes to details, it is possible to update details online with the Charity Commission.

These changes might also be required to be reportedto HMRC and possibly Companies House.

Changes you must report

You must wait 30 days after you’ve told HMRC about a change before making a claim, for example for Gift Aid.

You must report changes to your charity’s:

name
governing document
Phone and address details
bank account details
legal structure
managers including authorised officials, responsible person, nominees, agents or trustees
operations, for example what it does or who it helps

Before you start

You’ll need:

the charity registration number
the charity’s password if you’ve previously registered your details online

You can use the charity commission website service to change:

contact details
email addresses
trustee details
website address
financial year end
where your charity operates
the charity's classifications - what it does, who it helps and how it does it
the description of your charity’s activities
bank or building society account details

Informing Charity Commission about Changes in Your Details:

If your charity is a company

You must report changes to your charitable company's name to:

Companies House
then Charity Commission
then HMRC

Get help using the Charity Commission online service

You can contact the Charity Commission if you have a problem using the service.

Charity Commission Helpline or Contact Number

Telephone:

0300 066 9197

Monday to Friday, 10am to midday and 1pm to 3pm

Informing HMRC about Changes in Your Details:

Tell HMRC about any change to your charity by completing form ‘ChV1 – HMRC Charities change of details’.

Setting up a charity: How to setup a Charity in UK

Want to set up a charity in UK? You need to follow 6 steps in order to setting up a charity.

First step is to finding trustees for charity you are going to set up. You usually need no less than 3 trustees in order to proceed.
Ensure the charity has ‘charitable purposes for the public benefit’.
Pick a name for your charity.
Work out onthe structure for your charity.
Next step is to create a ‘governing document’ for charity
You can register as a charity if your annual income is over £5,000 or if you set up a charitable incorporated organisation (CIO).

Closing a charity

There can be numerous reasons behind shutting down a charity, such as:

a merger with another charity
Meeting the purpose of charity
losing funds or funding
Not meeting members requirement
Transforming into a company or charitable incorporated organisation (CIO)

Legal Requirements: Closing a Charity

Legal requirement: If you are closing your charity, there are regulations as per which you must inform the Charity Commission, and the charity commission must remove it from the register of charities.

Charity Commission Website: Charity Commission Login

Having trouble logging into charity commission website? Forgot a password or need to get a new one? Now, continue your charity's annual return or registration application, our guide will help youget a new or replacement password.