Charitable Company


This is a company limited by guarantee registered with Companies House, that is also registered with the Charity Commission. All the directors of the company are trustees, and all trustees are directors. The trustee/directors are elected at the AGM of the charity. Membership is determined by the trustee/directors and can consist exclusively of the trustee/directors, or can be a wider body.

 Accounting regulations

Must prepare accounts in accordance with:

  • FRS102 (section 1A if applicable)
  • Companies Act 2006
  • Charities SORP (FRS102)

Receipts and payments accounts are not permitted.

 Tax implications

  • Exempt from corporation tax on charitable trading, capital gains, and investment income
  • Mandatory Rates Relief (80% business rates reduction)
  • Charitable VAT exemptions and zero-rating reliefs apply
  • Does not normally need to file a corporation tax return


  • Non-profit aim is its main objective, and aims should be consistent with charity law
  • Limited liability
  • SITR may be available on loan stock issued (though this cannot be advertised – see below)
  • VAT, Business Rates and Corporation Tax: see above
  • Grant funders look favourably on charitable registration
  • Easy and cheap to set up


  • The Financial Services and Markets Act 2000 applies, so cannot advertise for loan investment from the public
  • Must be audited if income is over £1m (£500k in Scotland)
  • Needs an Independent Examination if income is over £25k – by a qualified accountant if income is over £250k
  • Preparation of accounts and trustees annual report is more complex, time consuming and expensive than for non-charities, due to the application of the Charities SORP.
  • Needs to file accounts at both Companies House and the Charity Commission, and keep both regulators updated with details of trustees/directors

Services required

  • Accounts preparation
  • Possible submission of Corporation Tax return CT600 with charity pages CT600E
  • Payroll (if employing people)
  • VAT advice, if necessary
  • Book-keeping, if required
  • Independent Examination or Audit, as necessary