Information - Organisational

Charity Law

Running a Charity

Charity Law

Charities need to comply with relevant charity law, for example, the Charities and Trustee Investment (Scotland) Act 2005 (referred to as “the Act”) and the Charities Accounts (Scotland) Regulations 2006. Details can be obtained from the website of the Office of the Scottish Charity Regulator (OSCR) - www.oscr.org.uk. More information can be found on the website of the Scottish Council for Voluntary Organisations (SCVO) - www.scvo.org.uk. The Scottish Government website contains a lot of useful information, including an updated list of Charity regulations - http://www.scotland.gov.uk/Topics/People/15300/charities

Accounts

Charities are required by Charity Law to produce particular types of accounts and to have their accounts externally looked at - guidance on what types of accounts and external scrutiny that charities require, including templates and examples, is available on the OSCR website - http://www.oscr.org.uk/meeting-our-requirements/charity-accounting/. See also the Accounts & Finance section of this website.

Charity Trustees

For the purposes of the Act, the group of people who manage and control a charity are known as “charity trustees”. You may refer to them as “Committee members”, or “Board members” etc, but under the law they are “charity trustees”.

It is important that charity trustees know what is expected of them, as individuals and collectively, under the Act. OSCR have published an essential guidance document “Guidance for Charity Trustees” which can be downloaded from their website www.oscr.org.uk or obtained from them at 01382 220446.

The Guidance covers eight topics:

  1. Who are charity trustees? (this includes who may qualify and who are disqualified)
  2. The general duties of charity trustees as required by the new charity legislation;
  3. The specific duties of charity trustees as required by the new charity legislation;
  4. Charity trustee remuneration (that is, payments or benefits in kind given to charity trustees other than for out-of-pocket expenses);
  5. The investment powers of trustees or trusts, including charitable trusts;
  6. The consequences of misconduct or “breach of duty” or if the requirements of OSCR are persistently not met;
  7. A checklist of duties and responsibilities linked to practical examples of good practice;
  8. Suggestions as to where to obtain more information and assistance.

Fundraising

Part 2 of the Act outlines powers and requirements in relation to Fundraising for Benevolent Bodies. More information is available on the OSCR website at www.oscr.org.uk/fundraising.stm and on the Funding section on this website.

Governing Documents

see the Governing Document section of the MVA website.

Making Changes

  • Consents - a charity that wishes to make certain changes, for example, change its name or amend its charitable purposes, requires permission from OSCR before it does so.
  • Notifications - charities must notify OSCR of certain changes, for example, changes to the principal office of the charity.

Guidance is available on the OSCR website www.oscr.org.uk

OSCR Requirements

Scottish Charities are annually monitored by the Office of the Scottish Charity Regulator (OSCR), based on the completion and sending in of:

  • an Annual Return
  • a Supplementary Monitoring Return (for charities with a gorss income of £25,000 or more)
  • a signed copy of annual accounts that have been "externally scrutinised"

Further information is available on the OSCR website http://www.oscr.org.uk/meeting-our-requirements/annual-monitoring/

Rates

Business premises occupied by a recognised charity and used wholly or mainly for charitable purposes can apply to the local authority for mandatory rates relief of 80% - for further information go to the website of the Scottish Council for Voluntary Organisations (SCVO) – www.scvo.org.uk - this website also includes information on Council Tax. Queries on Non-domestic Rates for Midlothian are dealt with at Chesser House, Gorgie Road, Edinburgh, tel: 0131 469 5121 – see www.midlothian.gov.uk.

Regulation

The statutory basis for the regulation of charities in Scotland is provided by the Charities and Trustee Investment (Scotland) Act 2005 (“the Act”) and supporting regulations. The charity law regulator is the Office of the Scottish Charity Regulator (OSCR) – see www.oscr.org.uk for more information. Individual charities may also be subject to other regulators, for example, Companies House, or theSocial Care and Social Work Improvement Scotland (SCSWIS) http://www.scswis.com/ (formerly the Scottish Commission for the Regulation of Care (Care Commission).

Tax

Some tax exemptions and reliefs on income, gains and profits, for example, on bank interest, however, some income may remain taxable – see HM Revenue & Customs (HMRC) website for further details – www.hmrc.gov.uk/charities/index.htm - however, some amateur sports clubs (involved in eligible sports) may be able to register as a Community Amateur Sports Club (CASC) to benefit from a range of tax reliefs without becoming a charity (see HMRC website).

Trading

Charities have to be careful that everything it does is in keeping with its charitable purposes and the provision of public benefit – see www.oscr.org.uk, www.hmrc.gov.uk/charities/index.htm and www.scvo.org.uk. For further information on Trading see the Social Enterprise Alliance Midlothian (SEAM) website www.seamidlothian.co.uk. The Charity Commission in England and Wales produces some useful information on charity trading, much of which will apply in Scotland as well but, if in doubt, checks should be made with OSCR - http://www.charitycommission.gov.uk/

 

MVA Community Toolkit - lots of useful information and model documents - http://www.mvacvs.org.uk/mva/toolkit.html

 

Disclaimer: the opinions expressed in any of the publications or websites mentioned are not necessarily the opinion of MVA and we cannot accept any responsibility for viruses or the integrity of downloads.

In addition, whilst we believe that the information on the website was accurate when it was written, it is up to you to check the current accuracy of the information.

If you experience problems downloading any documents, or unable to find the information you are looking for, or if you would like some help, please contact MVA’s Information Officer, Margaret Nisbet, who will do her best to help you.

Back to Charity Law page