Definition
A charity is an organisation set up only for charitable purposes that benefit the public. In England and Wales most charities with income over £5,000 must register with the Charity Commission, and charities get relief from most taxes on income they use for their charitable work.
What makes an organisation a charity
To be a charity an organisation must have only charitable purposes, and those purposes must be for the public benefit. It is run by trustees, who are normally unpaid.
Legal forms
| Form | Registered with | Limited liability |
|---|---|---|
| Charitable incorporated organisation (CIO) | Charity Commission | Yes |
| Charitable company | Companies House and the Charity Commission | Yes |
| Charitable trust | Charity Commission | No |
| Unincorporated association | Charity Commission | No |
Scotland and Northern Ireland have their own charity regulators.
Tax
A charity must also be recognised by HMRC to get tax relief. It can then claim exemption from tax on most of its income and gains, and reclaim tax on donations through Gift Aid.
Read more: Corporation Tax for charities and CASCs (CT600E).