Being a Charity
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Many voluntary organisations in Scotland are charities. Before applying for charitable status it is important that the implications are fully understood. CVS Hamilton/East Kilbride can advise you on how best to approach this. To arrange a meeting to discuss your needs please contact CVS Hamilton East Kilbride admin@cvshek.co.uk |
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What is a Charity?
A charity in Scotland is a legal organisation that is governed by a group of trustees, is non-profit making, has charitable aims/objectives and is listed in the Scottish Charity Register. An individual person cannot set themselves up as a charity nor can anyone who has been convicted of an offence involving dishonesty. Any individual who is an undischarged bankrupt cannot be involved in the management or control of a charity.
Advantages of becoming a Charity are:
Some of the main advantages of becoming a charity are:
- Tax relief on profits and interest earned on deposit
- Access to funding from bodies that will only support charitable organisations
- The ability to receive donations from companies that can claim tax relief under the Gift Aid Scheme
- Maximising financial return from donations from individuals through Gift Aid or Payroll Giving
- Obtaining rates relief (up to 80%) on any premises occupied by the charity
- Qualifying for some VAT concessions available to charitable bodies
Disadvantages of becoming a charity are:
Some of the main disadvantages of becoming a charity are:
- Increased administration
- Accountable to OSCR
- Must adhere to the Charities and Trustees Investment (Scotland) Act 2005
- Trustees have legal obligations
- Restrictions on how funds can be spent
- Restrictions on who can be a trustee
How to become a Charity?
Applying for Charitable status can take in excess of 3 months and will require you to have
- A constitution
- Document detailing the organisation's activities - ie business plan
- Completed OSCR application forms
- Recent accounts (if organisation exists)
- BoaManagement
Once OSCR receives an application it will apply the charity test as defined by the Charities and Trustees Investment (Scotland) Act 2005. The main aspects of the test is to ensure that:
- The organisation has one or more charitable purposes
- The organisation has no non-charitable purposes
- The organisation will have public benefit in Scotland or elsewhere
If your application is successful your organisation will be given a charity number (SCO******) and entered into the Scottish Charity register.
Other sources of information
SCVO : Scottish Council for Voluntary Organisations www.scvo.org.uk
OSCR : The Office of the Scottish Charity Regulator www.oscr.org.uk
