A step-by-step guide on how to set up a charity in England & Wales

Decide on the Charity’s Purpose

• Your charity must have a clear charitable purpose that benefits the public. Charitable purposes can include education, relief of poverty, health, or the advancement of arts and culture, among others.

• Ensure the purpose aligns with the 13 charitable purposes defined by UK charity law.

2. Choose a Charity Structure

• Charitable Incorporated Organisation (CIO): A legal form that provides the charity with its own legal identity and limited liability for trustees.

• Charitable Company: A limited company that is also a charity, with the benefits of limited liability.

• Unincorporated Association: A simple structure suitable for smaller charities without limited liability.

• Trust: A charitable trust is a structure where trustees manage the charity’s assets for its charitable purposes.

3. Choose Your Charity Name

• The name must be unique, not misleading, and not similar to another charity’s name. It should reflect your charity's purpose.

• You can check name availability through the Charity Commission.

4. Appoint Trustees

• Your charity must have at least three trustees (or two if it is a CIO). Trustees are responsible for the charity’s management and must act in the charity’s best interests.

• Trustees should be people with relevant skills or experience, and they must be over 18 years old.

5. Draft a Governing Document

• You need a governing document (e.g., a constitution, trust deed, or articles of association) that sets out your charity’s rules, aims, and how it will be managed.

• This document must outline the charity’s purpose, trustees' responsibilities, and procedures for managing the charity.

6. Register with the Charity Commission

• If your charity’s income is expected to be over £5,000 per year, you must register with the Charity Commission.

• Complete the registration online by providing details about the charity’s activities, finances, and governance.

• Submit your governing document and list of trustees.

• After reviewing your application, the Charity Commission will issue a charity registration number.

7. Register with HMRC for Gift Aid

• If your charity is eligible, you should register with HM Revenue and Customs (HMRC) for Gift Aid. This allows your charity to claim back 25p for every £1 donated by taxpayers.

• To register, go to the HMRC website and complete the Charity Registration form for Gift Aid.

• Ensure you keep accurate records of donations and the details of donors who are eligible for Gift Aid.

• Gift Aid is available for donations from individuals who pay UK tax, and you must have a Gift Aid declaration from the donor for each donation.

8. Set Up a Bank Account

• Open a bank account in the name of your charity. You will need your charity registration details and a copy of your governing document.

• This account is where you will manage funds and donations for the charity.

9. Fundraising and Financial Management

• Keep accurate records of all income, including donations, grants, and fundraising events.

• Set up financial management practices to ensure transparency and comply with charity law.

10. Comply with Legal Requirements

• Charities must adhere to regulations on accounting, reporting, and governance.

• File annual accounts with the Charity Commission and submit an annual return (if required).

• Comply with fundraising regulations and data protection laws.

11. Start Operating

• Once registered, you can begin your charitable activities and fundraising, making sure all funds are used to further the charity's aims.

• Regularly review and update your charity’s activities, ensuring they continue to serve the public benefit.

By following these steps, you can successfully set up and operate a charity in England, ensuring compliance with charity law, registering for Gift Aid to maximize donations, and focusing on your mission to make a positive impact in the community.

Speak to us