Advantages of becoming a Registered Charity - Community Action ...

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Public Recognition – charitable status gives an organisation ... VAT Relief – charities are liable to pay VAT on most things but can pay at a lower or zero rate on ...




Advantages of becoming a Registered Charity

Public Recognition – charitable status gives an organisation respectability/credibility. This may raise the public’s confidence in your organisation

Tax Relief – you can obtain tax relief on – income tax, corporation tax, stamp duty, VAT, rates, capital gains tax and inheritance tax. They can also claim back the tax paid on donations that are made to them

VAT Relief – charities are liable to pay VAT on most things but can pay at a lower or zero rate on some building works, on providing disability equipment and on heating and lighting

Council Tax – charities receive a mandatory 80% off the council tax bill for any property they occupy

Funding – registered charities may find it easier to get grants from funders, also they will be able to apply to more sources of funding

Free advice – registered charities can get free advice and support from the Charity Commission about being a charity

Volunteers – attract more volunteers and benefit your fundraising

Disadvantages of becoming a registered charity

• Charity law can limit your activities, such as political campaigning

• You can only trade in limited circumstances, related directly to your objects

• You must provide the Charity Commission with certain information each year e.g. annual reports and accounts. There are also additional rules and requirements to meet

• Trustees can’t be paid other than for out of pocket expenses so charities are unsuitable for cooperatives and similar worker controlled organisations

• Charity law imposes high standards of regulation and bureaucracy

• Trading, political and campaigning activities are restricted

• A charity must have exclusively charitable aims. Some organisations may carry out their aims by a range of activities, some of them charitable some not. To become a charity, this type of organisation would have to stop its non-charitable activities.

• Companies registered as charities have to comply with company law too

Source www.cvsmidlandandnorthbeds.org.uk







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