Does my Intermediate Body (or Churches Together group) need to register as a charity?
CTE's Directors are in the process of taking advice on charity registration for Intermediate Bodies. We'd just like you to be aware that if your IB is intending to change its charitable organisation (some are exploring CIOs) and is or has been an employer, you might be in danger of triggering an extremely expensive pensions cessation event. If you need more information about cessation events, the Baptist Union pension scheme has created a helpful web page.
We understand there is a way of avoiding triggering a cessation event when you change your legal charitable status. However this must be done as you change (it cannot be done after the event), and there are legally defined steps that you must follow absolutely. We strongly recommend that you take the necessary professional pensions and legal advice as you consider any change of your legal charitable status.
CTE staff do not have the expertise to give professional advice on this matter.
Health warning, March 2017: We are consulting to verify the information below which was written some time ago. It was written for Intermediate Bodies but may apply to some Churches Together groups too.
Normally all organisations, including churches and religious organisations, with charitable objects and an annual turnover over £5,000 are required to be registered. For many years, most churches have been excepted from this general requirement on the grounds that their national bodies oversee local accounts sufficiently to ensure they are in keeping with charity law. That has been changing in recent years, especially with the Charities Act 2006, and there has been a steady stream of Intermediate Bodies which have become registered charities. This, however, is a choice, recommended by CTE, as the 2007 Exception Order specifies that excemption also covers partnerships of excepted churches.
The advantages of registering as a charity are:
There is no doubt that you are in keeping with current charity law; without registration, there remains a question mark.
Employment issues become much clearer since, ultimately, the Trustees are responsible.
If you apply to funding agencies or trusts, they will ask for your registered charity number. They may not understand if you can’t give one.
When you are a registered charity, you can have any deposits in a gross interest account without paying tax on the interest. It isn’t much when rates are low, but it’s better than nothing.
There are obvious advantages in sorting your constitution and registering as a charity at your leisure, rather than scrambling to do so if/when the rules change and it becomes compulsory.
Be aware that the Charities Aid Foundation has helpful financial services for charities. CIO CIO CIO CIO CIO charity charity charity