Do you have an undying passion for alleviating suffering from the underserved individuals in society? Are vexed and passionate about addressing the concerns and needs of these individuals? There is a way to go! One way to address these challenges squarely is by setting up a charitable organization (or non-profit organization). If this is something you believe in, then there are steps to follow to set up a charity organization in the UK. After setting up the non-profit organization, you must register it. This post is intended to provide a comprehensive guide on how to register a charity in the UK.
What is a Non-Profit Organization?
A Charity organization is an entity formed to provide social, educational, religious, cultural, or other activities to the public without making a profit. These organizations raise funds solely for philanthropic purposes to better lives. Non-profit organizations are birthed out of a strong desire to support a particular point of view or ideology. They do not use the funds to profit individual persons or entities, rather, the funds are used to provide the aforementioned services to communities.
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How Do Charitable Organizations get Funding?
Funds for charitable organizations can come from many sources. However, the three most recognized sources of funds are:
- Donations by members of the public
- Donations by their founders
- Donations by their trustees.
Why you need to register your Charitable Organization in the UK
Setting up a charity organization is only a bit of the job you have done. After setting up the organization, you need to register it in the UK for a number of reasons. First, it will qualify your organization for financial assistance from government agencies. Second, you can get tax exemptions.
Generally, you must apply to register your charity if:
- its income is at least £5,000 per year or it’s a charitable incorporated organization (CIO)
- it’s based in England or Wales
The rules are different:
How to register a Charity in the UK
After establishing the organization, the next important thing to do is to register it with the relevant authorities. You can register your charity in the UK by following these steps:
- Organize the necessary documents you will need for the application.
- Apply for NGO status through the relevant government agency
- Operate your charity
Now that we’ve highlighted the steps to follow to register an NGO in the UK, let’s delve into each of them in detail.
1. Organize the Necessary Documents
This is the first step to follow to register a charity in the UK. You will need to provide answers to some questions that will be asked when you are applying. Some of the most often asked questions are:
- your charity’s charitable purposes
- the type of NGO you want to run
- how you intend to run your charity for public benefit
- proof that your charity’s annual income is above £5,000 unless you’re a CIO
You’ll need to provide the following documents when you want to register your charity in the UK:
- bank or building society details
- most recent accounts
- contact details, including a postal address
- trustees’ names, dates of birth, and contact details
- a copy of your charity’s governing document (in PDF format)
- Proof of income
The proof of income, if needed, can be any one of:
- your charity’s latest ‘published’ annual accounts (in PDF format) – must have been approved as proof of income by an independent examiner or auditor
- a recent bank statement (as a scanned image)
- a formal offer of funding from a recognized funding body (as a scanned image).
2. Register with the Charity Commission
After getting all the documents above ready, it is time to approach and register with the Charity Commission. Registration can be done online.
Once you have filed the application and included the necessary documentation, you may need to wait several weeks to hear back about your NGO status. You should be notified by the applicable government body if your application has been approved and your organization has been awarded NGO status.
3. Operate your Charity
After obtaining your NGO status, you can apply for exemption from paying local and federal taxes. You can apply for that through the HM revenue and Customs, HMRC.
To register with HMRC, you’ll need the following document
- bank account details and financial accounts
- officials’ details, including dates of birth and National Insurance numbers
- registration number
- charitable objectives (sometimes called purposes)
- governing document (sometimes called a rulebook) – this explains how your charity is run
- Government Gateway user ID and password – you can create an account when you register your charity’s details.
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