Small charities under £5,000
A charity in England or Wales with annual income under £5,000 usually doesn't have to register with the Charity Commission. It's still a charity, and can still get Gift Aid.
Do you have to register?
| Your charity | Under £5,000 a year | Over £5,000 a year |
|---|---|---|
| CIO | Must register. A CIO only exists once registered | Must register |
| Association, trust or charitable company | Doesn't have to. Can't register except in exceptional circumstances | Must register, unless excepted or exempt |
| Some church charities, Scout and Guide groups, armed forces funds ("excepted") | Doesn't have to | Doesn't have to until income passes £100,000. Exceptions: for example, a Scout or Guide charity that owns a building or has permanent endowment must register over £5,000 |
| Local branch of a larger charity | Check with the parent body | May not need to unless it's independent, for example controlling its own funds |
The Commission's example of an exceptional case: you've been offered significant funds, but the funder needs a registered charity number before paying.
The CIO choice
A CIO must register whatever its income. Other charities under £5,000 can register only in exceptional circumstances. Every CIO must file an annual return, accounts and a trustees' report with the Commission each year. An unregistered association doesn't file with the Commission, but its trustees must still keep financial records and prepare annual accounts. Choose the structure for how the charity will work, not just for a number.
Gift Aid without registering
A charity that isn't required to register can apply straight to HMRC for recognition. HMRC checks four things: charitable purposes only, under a UK court's control, registered if the law requires it, and run by fit and proper people. You'll need:
- bank account details and financial accounts
- officials' dates of birth and National Insurance numbers
- your charitable purposes and governing document
Once recognised, you get an HMRC charity reference. At a 20% basic rate, Gift Aid brings 25p for each £1 of an eligible donation. Claims must be made within 4 years of the end of the accounting period (the tax year, for charitable trusts). Applying to HMRC.
Eligible cash and contactless donations of £30 or less can earn a top-up without declarations, if you also claim Gift Aid for the same tax year and have had no penalty on a Gift Aid or GASDS claim in the current or previous tax year. The usual limit is the lower of £8,000 of donations or 10 times your Gift Aid donations. Claim within 2 years of the end of the tax year.
A governing document for a small charity
The Commission publishes a short "small charity constitution" for charities with annual income under £5,000 that don't own a building, don't employ anyone and don't intend to register. Under it, members elect three to ten trustees at the AGM, trustees meet at least three times a year with three present to decide, and they keep a membership list and accounts. It isn't meant for charities that own a building, employ people or intend to register.
What still applies
- Trustee duties. The same six as any charity: carry out the purposes for the public benefit, follow the governing document and the law, act in the charity's best interests, manage its resources responsibly, act with reasonable care and skill, and be accountable.
- Public benefit. Every purpose must be for the public benefit.
- Disqualification. The automatic disqualification rules apply to unregistered charities too.
- Personal liability. In an unincorporated association, the trustees take on its liabilities personally. Charity assets can normally cover them if they acted honestly and reasonably, but they may have to meet a shortfall.
- A bank account. The Commission says even a small charity needs one, and many banks offer treasurer or community accounts.
When income passes £5,000
Unless you're excepted or exempt, apply to register. The Commission takes action if it finds a charity that should be registered but isn't. Evidence of income can be your latest accounts, a recent bank statement or a formal funding offer from a recognised funding body. The small charity constitution isn't meant for registered charities, so review your governing document first, using your existing rules for changing it.