Charities Advice in Ayrshire
Taylor & Henderson act for a variety of Charities and ‘not for profit’ organisations. We can offer advice on many Charity matters including, for example formation of Charities, changes to Constitutions, Charitable Trustees powers and duties, Preparation of OSCR returns and general OSCR compliance matters.
What is a Charity?
The Charity and Trustee Investment (Scotland) Act 2005 defines a charity as being a body with charitable purposes which provides public benefit in Scotland, or elsewhere. The charitable purposes are set out in the Act and include matters such as prevention or relief of poverty, the advancement of education, religion, health, citizenship or community development, arts, heritage, culture or science, public participation in sport, human rights.
Charities can be small organisations such as the local table tennis club or Brownie pack as well as churches and large national charities, that we all recognise.
What are the benefits in becoming a charity?
The main advantage of becoming a charity is the tax benefits. There is exemption from most of the burdens of taxation including Income Tax, Corporation Tax, Capital Gains Tax, Stamp Duty Land Tax. However there are only limited reliefs from VAT. Tax recoveries can be made on deeds of covenant and via Gift Aid and from tax on interest and investments.
There are also various rating remissions which charities can claim and importantly, charitable status provides the access route to many grants that are only available to charities.
How do you become a charity?
The first step is to decide if your organisation wishes to be an unincorporated organisation with a constitution or an incorporated organisation (a company).
Unincorporated Organisations
The constitution will usually include matters such as the purpose and powers of the organisation, membership requirements and the framework for the managing committee and their powers.
Incorporated Organisations
Incorporation’ means giving the organisation a legal personality in its own right. The advantage of this is that it offers increased protection to people sitting on the governing committee, for example in the event of a legal action the organisation would be the target rather than individuals within it. As a Company there are obligatory reporting duties to Companies House.
In deciding whether to incorporate or not the risk factors need to be considered. If your organisation intends to employ staff, enter into leases of premises or deliver public services incorporation should be considered.
The next step is to apply to The Office of the Scottish Charity Regulator (OSCR) for charitable status. As a charity the organisation needs to comply with the regulations contained within The Charity and Trustee Investment (Scotland) Act 2005. OSCR oversees the enforcement of these regulations and charities need to ensure that they comply with OSCR’s requirements.
The Gilmour Trust
The Gilmour Trust is a Scottish Charitable Trust (SC000728) and was established in 1939 for the purpose of distributing the income from the Trust Funds to indigent people who were born in Irvine, have been resident in Irvine for a long period of time or have a close connection with Irvine. The Trustees are also empowered, in their sole discretion, to distribute remaining income amongst such charitable institutions in the United Kingdom as the Trustees may select and/or any charitable cause which the Trustees shall deem particularly worthy of support, provided that they are not supported by public funds.
