The Charity Commission for England and Wales

1. The Charity Commission for England and Wales Beryl Hobson Head of Large Charities Division

2. Content of Presentation • Background to the UK Charity Sector • The role of the Charity Commission for England and Wales • Current issues and challenges for charities and the Charity Commission • Our view of the role of the regulator

3. What is a charity? An organisation can and must register as a charity if it: • Delivers benefit to the public or a sufficient section of it • Undertakes exclusively charitable activity • Has an income of £5,000 (22,500 PLN) or more annually

4. Prevention or relief of poverty Advancement of education Advancement of religion Advancement of health or saving of lives Advancement of citizenship or community development Advancement of the arts, culture, heritage or science Advancement of amateur sport Advancement of human rights, conflict resolution or the promotion of religious or racial harmony or equality and diversity Advancement of environmental protection or improvement Relief of those in need by reason of youth, age, ill-health, disability, financial hardship or other disadvantage Advancement of animal welfare Promotion of the efficiency of the armed forces of the Crown or of the efficiency of the police, fire and rescue services or ambulance services Any other purposes currently recognised as charitable or in the spirit of any purposes currently recognised as charitable The 13 descriptions of charitable purpose

5. Public benefit Every organisation must be able to demonstrate its aims are for the public benefit: • Identifiable benefit(s) • Benefit must be to the public or section of the public

6. The charity sector in England and Wales • 190,000 registered charities • £45 billion (203 billion PLN) income • 925,000 trustees/ board members (mainly unpaid) • 750,000 paid staff • 50% of charities < £10,000 p.a. (45,500PLN)

7. Source of income to charities

8. Charities by income bracket • 100,000 charities have less than £10k (45,500 PLN) pa income • 615 charities have more than £10m (45m PLN) • Top 10 charities have total income of £3.4bn (15.3 billion PLN)

9. Tax advantages for charities • Relief from tax on most income and gains and profits from some activities • Income received from some sources paid gross of tax e.g. bank interest • Tax repayments on income received on which tax has already been paid (Gift Aid) • Charities must pay tax on any income, gains and profits that are not covered by specific tax exemptions or reliefs. • Charities pay Value Added Tax (VAT), but there are some separate VAT concessions for charities • Charities employing staff are required to deduct tax from salaries and pay it to the tax authority (H.M.Revenue & Customs)

10. Reporting requirements for charities • All registered charities must prepare an annual report and accounts • Charities with income > £10,000 p.a. (45,000 PLN) must send their report and accounts to Charity Commission • Where income > £25,000(112,400 PLN) the report and accounts are posted on the Charity Commission web site • Public have a right to see charity’s report and accounts • Charities with an income exceeding £10,000 (45,000 PLN) must have independent examination (£10,000 to £500,000) or audit (>£500,000)

11. Role of the Charity Commission

12. Background to the Charity Commission • Foundations for charity regulation laid in 1601 • Registrar and regulator of charities in England and Wales since 1853 • Charities Acts 1960, 1993 and 2006 • Non- ministerial government department • 4 offices and just under 500 staff • Annual budget of £32 million (144 million PLN) • Other countries starting to use similar system

13. Demonstrating our accountability • Accountable to Parliament – Annual report and accounts • Open Board meetings and AGM • Outward facing external communication • Inquiry reports • Public and sector consultations • Parliamentary committees

14. Objectives and Functions of the Charity Commission • Statutory Objectives: • Increase public trust and confidence in charities • Promote awareness and understanding of the public benefit requirement • Promote compliance with legal obligations of trustees • Promote the effective use of charitable resources • Enhance the accountability of charities

15. Objectives and Functions of the Commission contd. • Key functions • Registering new charities • Supporting charities • Monitoring and compliance • Championing the public interest in charity

16. How we regulate : 5 pronged approach • Collection and display of information • Generic advice and guidance • Support for self-regulation • Bespoke regulatory advice and consents • Compliance and enforcement – risk and proportionality

17. Display of the register

18. Display of the register ctd

19. Current issues for Charities and the Commission • Public benefit • Charities delivering public services • Independence of charities • Economic situation

20. Our view of the role of the regulator • High levels of public trust and confidence • Distinct and precious sector - regulating angels • Raising standards - advice & guidance & compliance • Independence and objectivity • Support for civil society

21. More information http://www.charity-commission.gov.uk/ Beryl.Hobson@charitycommission.gsi.gov.uk