Is setting up a charity the right thing to do?
There are a lot of reasons why people decide to set up a new charity. However, setting up a charity is not always the best way to proceed and, in some cases, it may not be legally possible.
A charity is a particular type of voluntary organisation - one that takes a distinctive legal form. Charities must provide benefit to the public, not to a specific individual. Their aims, purposes or objectives have to be exclusively those which the law recognises as charitable.
In accordance with charity law, an organisation must also apply for registration as a charity in Northern Ireland if:
- it has exclusively charitable purposes
- it is governed by the law of Northern Ireland
- it is an institution, that is, it is an organisation that is an independent body, the hallmarks of which include having control and direction over its governance and resources.
Registered charities have to obey a number of rules and regulations set out in charity law. A registered charity, for example, is not allowed to have political objectives or take part in political lobbying (other than in a generally educational sense). Charities that are registered as companies have to comply with company law too.
These things may suit your aims or they may restrict what you want to achieve.
Charitable tax status
A registered charity can usually be given a special tax status and benefit from a number of tax exemptions and reliefs. However, you will need to successfully register as a charity with the Commission in order to apply to Her Majesty's Revenue and Customs (HMRC) for charitable tax exemptions. Registration with the Commission is not a guarantee of receiving charitable tax status with HMRC, which makes an independent assessment on applications it receives.
If you have started a new a new charity and would like to apply to HMRC for charitable tax exemptions, please complete the Commission’s online Expression of intent form. You should outline in the form’s Special circumstances box that you are a new charity and would like to apply to HMRC for charitable tax status. This will allow the Commission to assess if you are eligible to be added to the Special circumstances list to apply for registration.
Not all new charities will necessarily want to apply to HMRC for charitable tax status and, if this is the case, you should fill out the Expression of intent form without indicating any special circumstances. This will allow your organisation to be added to the non-deemed list from which organisations will be called forward to apply for registration on an ongoing basis as part of the tranches.