Freqently Asked Questions about setting up a CHARITY in Scotland
Is there any guidance freely available about setting up charities in Scotland ?
Recognition of charities in Scotland is determined by HM Inland Revenue. They produce a couple of helpful introductory leaflets, available from:
H.M. Inland Revenue IR Charities
Meldrum House
15 Drumsheugh Gardens
Edinburgh EH3 7UL.
Their Charity Helpline is 0131-777 4040More detailed assistance is available from the
Scottish Council for Voluntary Organisations at:
SCVO, Mansfield, Traquair Centre, 15 Mansfield Place, Edinburgh EH3 6BB
Their telephone number is 0131-556 3882
Their website is at www.scvo.org.uk
What is the main difference between a Scottish charity and an English one ?
There is usually very little difference as the basic law relating to what constitutes a charity is the same in both countries, as is Company Law and the taxation issues involved. However, whilst in Scotland it falls to HM Inland Revenue to "recognise" a Scottish charity, in England and Wales it is the Charity Commission which "registers" an English charity.
The Charity Commission also monitors charities in England and Wales; there is no equivalent in Scotland, although the Scottish Charities Office has a specific role to become involved with Scottish charities which are in difficulty.
What legal structure should I choose for a new organisation which I hope will be recognised as a Scottish charity ?
There are a number of possibilities, but the main options for a new organisation are that it can be set up as:
Most not-for-profit organisations nowadays opt to become Guarantee Companies, because it is usually the most appropriate for a charity intending to enter into significant contracts (employment, building works, etc.)
Detailed advice and assistance should be sought at the earliest stage as, increasingly, an 'off-the-shelf' solution is unlikely to be appropriate.
What is a Guarantee Company ?
There is a Fact Sheet, What is a Guarantee Company? available by clicking here. It discusses the requirements for, organisation of, advantages and disadvantages of a Guarantee Company.
How can we decide whether to apply for Charitable Status or not for our new organisation ?
There is a Fact Sheet on Setting up a Charity available by clicking here.
Is the law relating to Charities likely to change with a new Scottish Parliament ?
A new Charities and Trustee Investment (Scotland) Act is expected in 2006.
The draft Bill was published in May 2004 and the Bill itself in November 2004.
For further information, see our Fact Sheet ‘Setting up a Charity’ available
by clicking here.
How does Gift Aid work?
There is a Fact Sheet 'Gift Aid and Other Giving' available by clicking here. It discusses Gift Aid, the use of Gift Aid for Membership Subscriptions and also other forms of charitable giving."
