Charitable company

What is it?

A charitable company is normally a company limited by guarantee that is registered as a charity by the Charity Commission. The constitution of the charity is its memorandum and articles of association, which must set out the charitable aims. The charity can own property so individual trustees do not need to be named as custodian trustees. The trustees have limited liability for the actions of the charity.

What are the accounting and filing requirements?

  • Accounts need to comply with the Companies Act 2006, the Charities SORP and the FRSSE.
  • Accounts and Annual Return need to be filed at the Charity Commission within 10 months of the year end, and with Companies House within 9 months of the year end. Also needs to complete an Annual Return for Companies House.

What are the tax implications?

  • Must register for VAT if making taxable supplies over the threshold.
  • Some purchases by charities attract zero rating relief, and some supplies by charities can be exempt from VAT
  • Must file a corporation tax return if requested to do so by HMRC. Most charity income is exempt from corporation tax, or is non-business in nature and therefore not taxable.

Slade & Cooper services

  • Preparation of accounts and independent examination
  • Audit if over the threshold (currently £1m income for years ended 31 March 2015 and after)
  • VAT advice so you know when registration might be necessary, and can take advantage of zero rating and exemption reliefs.
  • Charity Corporation tax returns
  • Payroll bureau

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