This helpsheet has been issued by ICAEW’s Technical Advisory Service to help ICAEW members to understand key aspects of the legal and regulatory framework for charities registered in England and Wales, Scotland or Northern Ireland.

Members may also wish to refer to the following related helpsheets:

• Charities – Financial reporting and scrutiny (England and Wales)
• Charities – Financial reporting and scrutiny (Scotland)
• Charities – Financial reporting and scrutiny (Northern Ireland)

In addition to specific requirements of the home jurisdiction, all charities must be established wholly for charitable purposes and meet the public benefit test.

Charities in the United Kingdom are regulated by one of three principal regulators which are:

• The Charity Commission (the Commission), for charities registered in England and Wales
• The Office of the Scottish Charity Register (OSCR) for charities registered in Scotland, and
• The Charity Commission for Northern Ireland (CCNI) for charities registered in Northern Ireland.

Each of the charity regulators has published guidance on what makes a charity:

• The Charity Commission’s publication is What makes a charity (CC4);
• The OSCR’s publication is Meeting the charity test: Guidance; and
• The Charity Commission for Northern Ireland’s publication is The public benefit requirement.

Most charities are required to register with the appropriate regulator as set out in the following sections.

Registering with the Charity Commission (England and Wales)

Most charities (unless excepted or exempt) in England and Wales are required to register with the Charity Commission if:

• The charity is a Charitable Incorporated Organisation (CIO) (this will be automatic) or
• The charity not a CIO but it has in excess of £5,000 income per year.

Excepted charities are also not required to register with the Commission if their income is below £100,000 per year. Excepted charities include:

• Churches and chapels of some Christian denominations (and funds connected with them)
• Charitable funds of the armed forces
• Scout and Guide groups.

Exempt charities are also not required to register with the Commission as they are regulated by a different organisation. Exempt charities include:

• Most Universities in England
• Many national museums and galleries
• Some school governing bodies or academy trusts.

The Charity Commission has published guidance on How to register a charity (CC21b).

Certain charities registered under the Charity Commission in England and Wales may also be required to register with the OSCR if:

• It is managed or controlled wholly or mainly within Scotland;
• It occupies land or premises in Scotland; or
• It carries out activities in any premises in Scotland.

Further guidance on when to register in Scotland is available in the OSCR website under Registration.

Registering with the Office of the Scottish Charity Regulator

All charities in Scotland are required to register with the OSCR which has published guidance on How to apply for charitable status.

Registering with the Charity Commission for Northern Ireland

All charities in Northern Ireland are required to register with the Charity Commission for Northern Ireland which has published guidance on Registration support.

Charities are subject to different legislation and regulations depending on where they are registered.

England and Wales

Charities registered in England and Wales are subject to the requirements of the Charities Act 2011 and the Charities (Accounts and Reports) Regulations 2008 (SI 2008/629).

Scotland

Charities registered in Scotland are subject to the requirements of the Charities and Trustee Investment (Scotland) Act 2005 and the Charities Accounts (Scotland) Regulations 2006 (SI 2006/218).

Northern Ireland

Charities registered in Northern Ireland are subject to the requirements of the Charities Act (Northern Ireland) 2008 and the Charities Act (Northern Ireland) 2013 in addition to the Charities (Accounts and Reports) Regulations (Northern Ireland) 2015 (SI 2015/384).

Charities can take a variety of different legal structures and the regulators offer guidance on determining which structures may be most appropriate as follows:

• The Charity Commission’s guidance is contained within Charity types: how to choose a structure (CC22a);
• The OSCR’s guidance is contained within its Legal forms factsheet; and
• The Charity Commission for Northern Ireland’s guidance is contained within Section 5 of its publication Starting a new charity.

The following sub-sections briefly outline a range of possible legal forms.

Unincorporated charity

This is an organisation only registered with its regulator. Its activities and beneficiaries are defined by its governing document e.g. a trust deed, charitable objectives or the constitution. There is no limitation to the liability of the charity in unincorporated structures.

Limited company

Registered as a company under the Companies Act (usually as a company limited by guarantee rather than shares) and with the regulator. Charitable companies have both a registered charity and a registered company number and the directors must comply with both company and charity law. Annual returns and accounts must be filed with both Companies House and the regulator.

Charitable incorporated organisation (CIO in England and Wales or SCIO in Scotland)

CIOs or SCIOs are a corporate form specifically designed for charities. Such entities enjoy the benefits of being incorporated (including limited liability), but are not companies subject to the requirements of the Companies Act and whilst they have to register with the appropriate regulator, they are not required to file documents with Companies House.

CIOs are not a legal form currently recognised in charity law in Northern Ireland.

Incorporated under other legislation

Charities may also be incorporated under other legislation such as the National Trust Act, the Co-operative and Community Benefit Societies Act 2014 or other acts. These charities will need to comply with the requirements of the legislation under which they are formed in addition to the relevant charity law requirements.

Incorporated under Royal Charter

Charities can be incorporated by the Charity Commission and Privy Council. The system dates back to before the constitutional monarchy was formed and therefore applications for royal charter are not laid before parliament, nor can parliament intervene to change these charities’ objects.

When deciding on the most appropriate structure for a charity, trustees should consider seeking legal advice to ensure that the structure selected is the most appropriate one for the charity.

Different financial reporting and scrutiny requirements apply to charities depending on where they are registered based. Further details can be found in the following helpsheets:

• Charities – Financial reporting and scrutiny (England and Wales)
• Charities – Financial reporting and scrutiny (Scotland)
• Charities – Financial reporting and scrutiny (Northern Ireland)

ICAEW members, affiliates, ICAEW students and staff in eligible firms with member firm access can discuss their specific situation with the Technical Advisory Service on +44 (0)1908 248 250 or via webchat.