Charities & Trusts
Building Trust Through Financial Excellence
A charity is an organisation established for charitable purposes and public benefit, while a charitable trust is a structure in which trustees manage assets for charitable aims.
Charities support important causes such as poverty relief, education, health, heritage, and environmental protection. In the UK, charities are regulated separately in England and Wales, Scotland, and Northern Ireland, although tax rules apply UK-wide.
The sector has evolved from the Statute of Charitable Uses 1601 through major legislation, including the Charities Acts and recent reforms, which have shaped charitable purposes and the public benefit requirement.
Legal Framework and Charitable Purposes
Charities Act 2011:
• Established exclusively for charitable purposes.
• Operates to provide public benefit and support charitable activities.
• Must comply with relevant charity laws and regulations.
Recognised Charitable Purposes:
• Supports poverty relief, education, health, and religious activities.
• Promotes community development, arts, culture, science, and sport.
• Advances human rights, environmental protection, animal welfare, and emergency services.
Public Benefit Requirement:
• Must operate for the benefit of the public.
• Benefits should be accessible to the public or a sufficient section of it.
• Activities must demonstrate a clear and genuine public benefit.
Exclusively Charitable:
• Must be established solely for charitable purposes.
• All activities should support its charitable objectives.
• Cannot operate for non-charitable or private gain purposes.
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Compliance with Compassion
Tax Benefits
Gift Aid Relief
• Charities can claim additional funds through Gift Aid.
• Eligible donations from UK taxpayers can be increased in value.
• Donors pay no extra cost when Gift Aid is claimed.
Corporation Tax Relief
- Donations and grants received for charitable activities
- Investment income earned by the charity
- Income used directly for charitable purposes
Capital Gains Tax Relief
- Charities are usually exempt from Capital Gains Tax
- This exemption applies when gains are used for charitable purposes
- It helps ensure more funds are directed towards charitable activities
Business Rates Relief
- Charities can receive at least 80% relief on business rates
- Relief applies to properties used for charitable activities
- Local councils may offer additional discretionary relief
VAT Reliefs
- Some goods and services purchased by charities may qualify for reduced-rate VAT
- In certain cases, purchases may be zero-rated for VAT
- Eligibility depends on the nature of goods/services and how they are used for charitable purposes
Inheritance Tax Benefits
- Assets left to a registered charity are generally exempt from Inheritance Tax
- This exemption applies when the assets are given through a valid will or estate
- It helps ensure more value from the estate goes to charitable purposes
Why Professional Accounting Support Helps?
Professional accountants help charities and trusts:
- Claim all available tax reliefs
- Manage Gift Aid correctly
- Meet HMRC requirements
- Maintain accurate records
- Avoid penalties and compliance issues
Charities and trusts may benefit from valuable UK tax reliefs, including Gift Aid, Corporation Tax exemptions, Capital Gains Tax relief, Business Rates Relief, and certain VAT reliefs.
Professional accounting support helps organisations maximise these benefits while ensuring full compliance with HMRC and Charity Commission requirements.
How will CBM Accounting help you?
CBM Accounting offers complete setup and compliance support for UK charities and trusts, including registration with the Charity Commission and HMRC. We manage Charities SORP accounts, independent examinations, and Gift Aid claims. We also ensure TRS compliance and provide cross-border advisory for international clients with UK assets.
UK charities and trusts operate under strict regulations set by the Charity Commission and HM Revenue & Customs. Proper financial management ensures compliance, protects trustees, and maintains public trust.
Charity & Trust Registration
- Charity registration assistance
- Trust setup guidance
- Governance and compliance support
- Regulatory registrations
Accounting & Bookkeeping
- Day-to-day bookkeeping
- Fund accounting
- Financial record management
- Management reports
Annual Accounts Preparation
- Charities SORP compliant accounts
- Trustee reports
- Financial statements
- Independent examination support
Tax Compliance & HMRC Support
- Gift Aid claims
- Charity tax exemptions
- Corporation Tax guidance
- HMRC correspondence and support
Trust Registration Service (TRS)
- Trust registration
- TRS compliance reviews
- Beneficial ownership reporting
- Ongoing compliance management
OUR SERVICES
FAQs
What is a charity in the UK?
A charity is an organisation that works for the public good. It supports causes such as education, health, poverty relief, and community projects.
What is trust?
A trust is a legal arrangement where trustees manage money, property, or other assets for the benefit of others.
Do charities pay tax in the UK?
Many charities receive tax relief on their income and gains. They must meet HMRC rules to qualify for these benefits.
What does a trustee do?
A trustee manages the charity or trust. They make sure it follows the law and uses its funds properly.
Why do charities need accounting records?
Accounting records help charities track income and spending. They also support annual reporting and compliance.
What is Gift Aid?
Gift Aid allows charities to claim extra money from HMRC on eligible donations made by UK taxpayers.
What is the Trust Registration Service (TRS)?
The Trust Registration Service is a UK register for certain trusts. It helps improve transparency and compliance.
Do all trusts need to register with the TRS?
No. Some trusts are exempt. Trustees should check whether their trust needs to be registered.
Why is bookkeeping important for charities?
Bookkeeping keeps financial records accurate and up to date. It helps charities manage their money and prepare accounts.
Can an accountant help a charity or trust?
Yes. An accountant can help with bookkeeping, annual accounts, tax compliance, Gift Aid claims, and financial reporting.
Do charities pay tax in the UK?
Most registered charities do not pay tax on money used for charitable purposes. This can include donations, grants, and some types of income.
What tax benefits do charities get?
Yes, some trusts can receive tax relief depending on their structure and purpose. It is important to get advice to understand what applies.