A. General information about the Charity Commission for Northern Ireland.
B. Charity regulation and the powers of the Commission.
C. Charity registration.
D. Charity accounting requirements.
E. Establishing/closing/merging a new charity.
F. General questions.
G. Where can I find help and advice on;
A. General information about the Charity Commission for Northern Ireland.
What is the Charity Commission for Northern Ireland?
The Charity Commission for Northern Ireland (CCNI) is the new independent regulator of charities in Northern Ireland. We are responsible for ensuring that Northern Ireland has a dynamic and well governed charity sector, in which the public can have confidence.
The Commission is a non-departmental public body supported by the Department for Social Development (DSD) and established under the Charities Act (NI) 2008.
The functions of the Commission are laid down in the Charities Act and some are as follows:
• determine whether organisations are in fact charities and maintain an accurate and up-to-date register;
• encourage the better administration of charities;
• provide information, advice and guidance where appropriate; and
• identify and investigate alleged misconduct or mismanagement in the administration of charities.
The Commission has been broadly welcomed by charities within Northern Ireland, many of whom have been advocating the introduction of regulation for some time.
Where can I find a list of charities working in Northern Ireland?
In order to work with charities, the Commission firstly must establish which groups and organisations are legitimate charities. The Charities Act (NI) 2008 Act establishes that to be a charity in Northern Ireland, you must be registered with the Charity Commission.
However because there has been a delay in the registration of charities, this is technically not possible at present. In the interim, the Commission deems charities to be those organisations who have registered with HM Revenue and Customs for charitable tax purposes.
A publicly accessible list of these organisations, termed the "deemed list", appears on the Commission website. Members of the public can raise a confidential concern in relation to any organisation published on this list by completing the relevant concerns form. It is important to read our guidance on what types of issues we want to hear about.
It is also important to remember that if an organisation does not appear on this 'deemed' list, it does not necessarily mean it is not a charity. Some organisations decide not to register with HMRC for charitable tax purposes but still are legitimate charities with purely charitable objects.
The charity register, which will be established by the Commission, will remove any ambiguity as all charities - regardless of whether they wish to access charitable tax relief or not - will be required to register. At this point, if an organisation does not appear on the list, it is not a charity.
B. Charity regulation and the powers of the Commission.
What does charity regulation mean?
As the new regulator for charities operating in Northern Ireland, the Charity Commission helps to ensure that charities can operate effectively within a strong and clearly defined legal, accounting and governance framework.
In practice this means that every organisation operating as a charity within Northern
Ireland must demonstrate that they are doing so within the requirements of the law.
Regulation will help to ensure that:
• charities maintain their independence;
• organisations operating as charities have purely charitable purposes;
• organisations operating as charities are run for public benefit, and not for private advantage;
• all reports of serious mismanagement or deliberate abuse by or within charities are detected and remedied;
• the public can have confidence in charities operating in Northern Ireland.
Regulation has been a feature of the charity sector in England and Wales for almost thirty years. In Scotland, the Office of the Scottish Charity Regulator has been operational since 2005.
The Charities Act (NI) 2008 is a lengthy and detailed piece of legislation. As such the powers contained within the Act are not all brought into force on one single date. Rather, they are given effect through various Commencement Orders. These Orders roll out specific sections of the Act in a way that is co-ordinated and gradual.
Following three separate Commencement Orders to date, the Commission has a range of powers which are exercised regularly. The fourth Commencement Order is due in the first half of 2012, and further information will be provided closer to the time.
What investigatory powers does the Commission have?
The Charity Commission seeks to protect charities where there has been serious misconduct or mismanagement in the administration of the charity. We may also intervene if it is necessary or desirable to act to protect property or the proper application of charity assets.
We can do this through the launch of an investigation, and if necessary, an intervention which is aimed at protecting the charity; its beneficiaries, donors, assets and reputation.
Members of the public should contact the Commission if they have a concern about the operation of a charity within Northern Ireland. Not all concerns lead to investigations: we will not, for example, investigate a concern if there is no evidence to back it up.
We will however look into the affairs of a charity and instigate a statutory enquiry if the concern raised is serious and evidence-based. All of our actions will be proportionate to the concern raised; in most cases we are able to work with the charity involved to resolve any issues without having to recourse to using our statutory tools.
What other powers does the Charity Commission for Northern Ireland have?
In addition to our investigatory powers, the Commission has a range of other powers which are utilised regularly. These include:
Providing information and advice
The Commission has the power to give advice and guidance on any matter relating to the performance of a Trustee's duties. This will empower charities and enable them to work on their internal structures to ensure good governance within the organisation.
- Requiring a charity to change its name
In certain instances the Commission can require a charity to change its name. These instances include where a name:
- misleads the public as to the true nature of the charity's purpose or activities;
- includes a word or expression which is likely to mislead the public as to the status of the charity;
- gives the impression that it is connected in some way to a particular cause or matter, when in fact it is not;
- is offensive.
A summary of other powers include:
• to call for documents and search records;
• to disclose information or compel the disclosure of information;
• to give specific directions to protect a charity such as suspend or remove a trustee;
• to determine the membership of a charity;
• to authorise dealings with charity property;
• to authorise ex gratia payments, etc;
• to give directions about dormant bank accounts;
• to enter premises.
The powers of the Commission will increase incrementally as other Commencement Orders come into force. The Commission's website will provide updates as this process develops.
C. Charity registration.
What does registration mean?
The Charities Act (Northern Ireland) 2008 requires all organisations that operate for a charitable purpose to apply for registration with the Charity Commission for Northern Ireland.
Once an application for registration is made, and the organisation is found to have met the necessary requirements e.g. charitable purpose and 'public benefit' requirement, it will be given a unique Northern Ireland Charity Registration Number (NIC number) and listed on the public register of charities.
The register will be a publically available list of organisations that have been confirmed by the Charity Commission for Northern Ireland as being a registered charity in Northern Ireland.
Has charity registration started?
No - it was originally planned that registration would begin at the end of June 2010.
However as a result of legal advice on the robustness of the definition of 'public benefit', the Commission referred the legislation back to the Department for Social Development. The Department accepted the Commission's assertion that a legislative amendment was necessary to allow us to begin to register charities.
In July 2012 the Charities Bill was introduced into the Assembly. Once passed, the Bill will amend the Charities Act and permit the Commission to consult publically on our public benefit guidance, eventually leading to charity registration. This consultation is likely to happen in Spring 2013.
View the progress of the Bill on the NI Assembly website (External - opens new window)
http://www.niassembly.gov.uk/Assembly-Business/Legislation/Primary-Legislation-Current-Bills/Charities-Bill/
This means that we should be able to register charities in a phased way from late 2013.
At present there remains no requirement, or indeed provision, for an institution to register as a charity, other than with her Majesty Revenue and Customs (HMRC) if they choose to do so.
The phasing in of registration will commence as soon as possible once this work is complete, and the Commission will go public with this information through our website and the press.
What is the "public benefit" requirement?
"Public benefit" is the legal requirement that every organisation, set up for one or more charitable purposes, must be able to demonstrate for registration. The "public benefit" requirement details that an organisation which operates for a charitable purpose must also provide benefit to the general public. This benefit must not be unduly restrictive ie it cannot be limited to a privileged few.
Further information on the "public benefit" requirement, charitable purposes and fulfilling the requirements for registration will be published in our Public Benefit Guidance and Registration Guidance in due course on our website.
What are charitable purposes under the Charities Act (NI) 2008?
In order to register as a charity the activities of any organisation must fall under one or more of the twelve charitable purposes as prescribed by the Act. These charitable aims are as follows:
a) the prevention or relief of poverty;
b) the advancement of education;
c) the advancement of religion;
d) the advancement of health or the saving of lives;
e) the advancement of citizenship or community development;
f) the advancement of the arts, culture, heritage or science;
g) the advancement of amateur sport;
h) the advancement of human rights, conflict resolution or reconciliation or the promotion of religious or racial harmony or equality and diversity;
i) the advancement of environmental protection or improvement;
j) the relief of those in need by reason of youth, age, ill-health, disability,
financial hardship or other disadvantage;
k) the advancement of animal welfare;
l) any other purposes recognised under existing charity law or section 1 of the Recreational Charities Act (NI) 1958
It is important to note that for an organisation to be registered as a charity its purposes must be purely charitable.
What type of organisations can be registered as a charity?
All organisations, no matter how large or small, constituted in Northern Ireland to operate for a charitable purpose will be required to register with the Charity Commission for Northern Ireland.
Unlike the charity legislation in force in England and Wales, the Charities Act (NI) 2008 does not stipulate a minimum turnover threshold for registration. This means that all organisations, irrespective of annual turnover must, in time, register with us.
When a charity is invited to register, they must submit the governing document or constitution of the organisation. This will enable the Commission to decide if the charitable objects of the organisation meet with the charitable purposes laid down by the Act. The governing document will also be examined in consideration of whether the organisation fulfils the public benefit requirement laid out by the Charities Act (NI) 2008.
In practice there are a number of different legal forms that charitable organisations can take. Most will take one of the following forms:
- Charitable Unincorporated Association (CUI)
Most of the charitable organisations operating in Northern Ireland are constituted as Charitable Unincorporated Associations. Typically these are smaller clubs and associations made up of individual members. They have a constitution which outlines the rules for membership. Members appoint a Committee of Management who act as Trustees.
- Company Limited by Guarantee
This is currently the standard model for a not-for-profit company. It has a separate legal personality with a Memorandum and Articles of Association, and is registered at Companies House. Typically a Company Limited by Guarantee has a board of Directors who act as Trustees.
- Industrial and Provident Society
This form is commonly used by trading businesses such as co-operatives, or societies for community benefit. This includes Housing Associations and Credit Unions, which are corporate bodies with limited liability
- Trust
This is an organisation created by a Trust Deed or Settlement. They have no
membership and are controlled by a single tier of Trustees. They have no separate legal personality meaning Trustees are personally liable for recovery.
- Charitable Incorporated Organisation (CIO)
This status does not exist at present but the Charities Act (Northern Ireland) 2008 also makes provision for the future formation of a new legal charitable entity, Charitable Incorporated Organisations (CIOs).
The purpose of a CIO will be to allow for an organisation to be legally constituted in a manner similar to a Company Limited by Guarantee, but to operate for a solely charitable purpose(s). As a new legal entity the constitution of CIOs require the passing of primary legislation as laid out in the Charities Act.
Are organisations already registered with HMRC for charitable tax status required to apply for registration?
Yes - even if an organisation is already registered with HM Revenue & Customs for charitable tax status, and has an HMRC charity reference number, it will still be
required to register, once registration begins.
The Commission holds a list of the organisations registered with HMRC and operating in Northern Ireland. As part of the phasing in of registration, the Commission will contact these organisations and invite them to come forward and register.
No further action is required by these organisations until they hear from the Commission. Their charitable status will remain whilst they are on our list.
How will registration of a new charity take place?
Newly established organisations and those not previously registered with HMRC, cancome forward for registration on an ongoing basis once registration has commenced.
From this time onwards any organisation wishing to be recognised as a charity in Northern Ireland will have to register with the Commission.
Registration will take the form of an online application. If an individual is unable to complete the application in this format, we will be able to provide a paper form as an alternative to the online system.
Organisations wishing to benefit from charitable tax status must still register with HMRC for tax purposes, however the process will be streamlined as a result of registration with the Commission.
If an organisation operates in Northern Ireland but is based in England & Wales, Scotland, or the Republic of Ireland will it be required to register with the Charity Commission for Northern Ireland?
The Charities Act (NI) 2008 has made special provision for charities registered elsewhere in the United Kingdom and in the Republic of Ireland. If they operate in Northern Ireland, these charities will still be required to make an application to us to be registered on our Register of Charities.
Such institutions are termed by the Act as 'section 167 institutions' and the regulatory obligations are lighter than for those not registered elsewhere.
The intention of the new legislation is to bring in reduced reporting and registration requirements for organisations that are already registered in other countries.
Once registration begins, how long will a decision on an application take?
Until we begin to register charities we won't know how long the registration and decision making process will take. In Scotland the process takes around three months and the Commission hopes to be offering a similar timeframe. However, in the initial start-up stages this may not always be possible. The Commission will be transparent in all of its work, and will make sure that organisations are kept updated as to the status of their application.
D. Charity accounting requirements.
Do charities have to submit financial information as part of current regulatory procedures?
In the future, registered charities will have to prepare a Trustee Report and an Annual Return and submit these documents to us as part of their accounting obligations. It is important to note that this requirement is not live at present as registration has not yet been commenced.
In terms of financial requirements, the Charities Act (NI) 2008 sets out the following as a guide for what must be submitted against three audit thresholds based on annual turnover:
Annual Turnover Requirements
|
Annual Turnover
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Requirements
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|
<£100k
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Gross Turnover Income and Expenditure Accounts signed by and Independent Person
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£100k-500k
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Gross Turnover Accrued Accounts signed by an Independent Examiner
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>£500k
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Gross Turnover Fully Audited and Signed Accounts
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There will be further public consultation by the Department of Social Development on accounting obligations for different organisations. This will enable the charity sector to have its say on the best way for them to meet their requirements. Details of consultation events will be published on our website.
Once registered as a charity with CCNI will I still need to file my accounts with Companies House?
Yes, if your organisation is registered as a Company with Companies House, you will still be required to file your accounts with them in addition to the annual financial returns submitted to the Commission.
E. Establishing/closing/merging a charity.
How can I create a new charity?
Establishing a new charity is an exciting - and potentially daunting -prospect which requires serious consideration. This includes thinking about whether there are existing charities with the same purposes and activities as yours, and governance issues surrounding the operation of the new charity. The Northern Ireland Council for Voluntary Action (NICVA) operates a charity governance and advice service to provide help with such issues.
The Charity Commission for Northern Ireland (CCNI) is unable to commence the registration of charities operating in Northern Ireland until the Charities Act (NI) 2008 has been amended.
Until the amendment is made, institutions which operate for charitable purposes may apply to HM Revenue and Customs for charitable tax status which, if granted, will entitle the organisation to certain tax benefits.
The HM Revenue and Customs website provides useful information on how to apply for charitable tax status, specifically the Tax Guidance for Charities section.
The HMRC charity helpline telephone number for HMRC is 08453-020203 (Bootle, Liverpool).
How do I close or wind up a charity?
At the moment there is no requirement to notify the Charity Commission if your charity closes. However, when registration commences notification will be necessary in order to take the charity off the register of charities.
Until such time as we have commenced registration, you should consider the following points if closing or winding up a charity:
• what will happen to the charity land and/or property?
• what provisions are there in the governing documents relating to the closure of the charity?
• are you registered with any other regulator, for example if you are registered as a charity in England and Wales, you should inform the Charity Commission for England and Wales?
• if you registered with HMRC for charitable tax purposes, HMRC will require notification;
• you have a duty to inform Companies House if your organisation is registered there;
• where there are any remaining assets, both financial and other (e.g. - equipment), you may need to make an application to the Department for Social Development to apply the remaining assets cy-près to another charity with similar aims and operating, in so far as possible, in a similar area.
How do I merge my charity with another charity?
It is not the agenda of the Charity Commission to push charities together or to force mergers. Diversity and independence are important strengths in the Northern Ireland charity sector and we recognise that every charity has its own distinctive contribution to make to society.
On the other hand, some charities may decide that coming together to form a broader group is the best way of meeting current and future needs. There is currently no need to inform us of a proposed merger. When registration and the merger provisions in the Charities Act (NI) 2008 are commenced, this will change and there will be an obligation to inform us. There may also be circumstances where we need to provide a consent for the merger and we will need to update the charity register.
If you are considering a charity merger you should consider the following points:
• is the merger in the best interests of the charities' beneficiaries?
• are the charities involved compatible in objects, culture and values?
• are charities' trustees united in believing that the merger is the best way forward?
• effective communication with all stakeholders from the outset is vital - processes and outcomes should be clear to all involved;
• identify the key roles and responsibilities in the merger process;
• communicate and negotiate in a way that reflects the interests of all parties.
The Northern Ireland Council for Voluntary Action (NICVA) provides information on mergers and collaboration. You can gain information and advice from the CollaborationNI section of the NICVA website.
F. General information.
Please see the case study page of our website for practical examples of how the Charities Act (NI) 2008 is applied at present.
Can someone from the Commission come to speak to my organisation about charity regulation?
The Commission are keen to engage with as many groups and organisations as possible. However, with a limited number of staff, it is not possible to get out to every group that requests a briefing.
What we can do however is speak to a number of groups during one session. This may involve, for example, organising a single session with a number of local groups or organisations.
For more information on organising a briefing on any aspect of charity regulation please contact us on admin@charitycommissionni.org.uk
How can I contact the Charity Commission for Northern Ireland (CCNI)?
Our preferred, and most effective method of contact us is via email: admin@charitycommissionni.org.uk
Telephone
If you need to speak to someone over the phone you can call us on 028 3832 0220 Monday to Friday, 9am to 5pm, except public holidays. If you have a media or public affairs enquiry, you can contact our Communications Officer Shirley Kernan on 07827338978 or email shirley.kernan@charitycommissionni.org.uk
Post
Email is the easiest, cheapest and quickest way for you to contact us. We ask you if at all possible not to write to the Commission, but to email us instead. If you are unable to use email you can write to us at the following address:
Charity Commission for Northern Ireland
257 Lough Road
Lurgan
Craigavon
BT66 6NQ
Or call on
Telephone: 02838320220
Text number: 02838347639
Fax number: 02838345943
G. Where can I get help and advice on other issues including:
• funding opportunities for charities including how to obtain street collection permits;
• further advice for trustees.
Currently charities and other community organisations carrying out a public collection will need to seek a permit from the Police Service for Northern Ireland. The station local to where the collection is being held should be contacted.
The permit will set out the conditions under which the collection or collections are to be carried out. The Charities Act (NI) 2008 provides for the issuing of permits by the Commission, however this section of the legislation is yet to be commenced.
In the longer term the Charity Commission for Northern Ireland will produces its own guidance to help charities in these and other areas. Until then useful information is available from the following organisations:
The Northern Ireland Council for Voluntary Action (NICVA)
www.nicva.org (External link)
The Charity Commission (England & Wales)
www.charity-commission.gov.uk (External Link)
The Parent Teacher Association (PTA)
www.PTA.org.uk (External link)
The Department of Social Development, Voluntary & Community Unit www.dsdni.gov.uk/guide_for_trustees.doc (MS Word, 186Kb) (External link)
