How to apply for charitable status

Updated: 18 Aug 2018
Charitable associations are exempt from tax & rates
Money
5 main types of activity are considered charitable:
  • The advancement of education
  • The promotion of religion
  • The relief of poverty
  • Other purposes beneficial to the community
  • Provision of sports and leisure activities

What kind of organisations can't claim charitable status?

Any group involved in political campaigning cannot be described as a charity. It is unlikely that a group will be accepted as a charity if it is just involved in, for example:
  • providing jobs for the unemployed
  • campaigning for housing repairs
  • producing and selling a community newspaper
  • campaigning for changes in Housing Executive policy
The Charity Commissioners Report (1976) suggests that a "charity is not prohibited from engaging in political activities provided that these are carried out in furtherance of its objectives".
It is important that the objectives of a community association are outlined at the start of its constitution. It should, therefore, be possible to represent the opinions of tenants to the Housing Executive, the district council and government departments and still remain a charity.

What are the advantages of charitable status?

Charitable status can be important because:
  • a charitable association will be exempt from paying tax on any money it receives. Very few community associations would, however, have enough income to justify paying tax.
  • a charitable association will not have to pay rates. This is important if an association rents a house and other accommodation from us as a community base.
  • a charitable association will be able to apply for money to grant-making charitable trusts which will make grants available only to registered charities.
  • some companies will give discount to charities for goods or services provided.
  • a charitable association will have easier access to charitable appeals on radio and/or television.

What are the disadvantages of charitable status?

There are some disadvantages of having charitable status:
  • Charities must confine their objectives and activities to those which are charitable in law.
  • Charities cannot carry on permanent trading activities unless the trade is exercised in the course of carrying out a primary purpose of the charity, or the work in connection with the trade is mainly carried out by the beneficiaries of the charity.
  • Charities cannot have political objectives, although a charity can properly seek to influence opinion on particular issues which are directly relevant to its objectives and experience.
  • Charity trustees cannot be paid for their services.

How do you obtain charitable status?

The Inland Revenue is the government department which decides if a group can become a charity under charity law. In making the decision, its officers will require a copy of your association's constitution and a summary of its activities.
This need only be a short description, (possibly one page in length), of the sorts of activities your association has done in the past or intends to do in the future. The purpose of the summary is to describe your association to the Inland Revenue and to provide reassurance that it is carrying out only charitable activities.
It is important that you state the objectives of your association and how your activities are aimed at reaching these objectives. For example, it may be involved in:
  • working with us to improve the housing and living condition of the local community.
  • carrying out surveys to assist in the improvement of an area.
  • liaison with the Department of the Environment to improve the quality of roads, lights and environment of an area for the benefit of all residents.
  • working with a District Council to provide leisure and community facilities for an area.
  • liaison with other statutory and voluntary agencies to assist in the provision of facilities for children, youth, unemployed, women, elderly and disabled in an area.
The draft constitution that you can download from this site has already been passed as having met the Inland Revenue's criteria under charity law.

Who should I contact for advice?

If you are not sure whether your association's activities are charitable you can seek advice from either SCNI or NICVA

Where do I send the application for charitable status?

Your constitution and summary of activities should be sent to:

HM Inspector of Taxes

Inland Revenue
Claims Branch Charities Division
St John's house
Merton Road
Bootle, Merseyside
L69 9BB
Your accompanying letter should explain that your association is seeking charitable status.

When will a decision be made?

The Inland Revenue can take at least six weeks to reply to you. If they accept your constitution as a charitable one and that your association is to be recognised as a charity, they will tell you by letter, giving your Inland Revenue reference/ charitable number.
The Inland Revenue may not initially be prepared to award charitable status, but may indicate how your association is capable of becoming a charity, by suggesting alterations to your constitution.
If your association is happy with the changes suggested, rewrite your constitution to include the changes. Then, resubmit the new constitution for adoption at an appropriate meeting of the association. Don't forget to keep a record of the decision and resubmit your constitution to the Inland Revenue for approval

Does charitable status need to be applied for every year?

No. Once your association has received its Inland Revenue reference/ charitable number you need not re-apply. However, in order to retain your charitable status, your association must submit its accounts to its local Income Tax Office annually.