Charity Tax Status

househero

I am interested in setting up a charity to help people in Ireland suffering from cancer. The business model is solid and the admin/volunteers in place to run the charity. I have a question about the best available operational and legal structure of the charity.

The Irish charity structures do not look as favorable as the new English Charitable Incorporated Organisation http://en.m.wikipedia.org/wiki/Charitable_Incorporated_Organisation with less rules, increased simplicity and reduced accountancy requirements.

I want as little time and money wasted on government required admin to give me more time to help the people who need it.

Does anybody know of any tax restrictions or potential problems in establishing the charity in the UK that benefits people in Ireland?

A bit of a specialist question, sorry.

Alan Shore

Are you proposing to set up a company in the UK apply for charity status in the UK and operate in Ireland?

Charities in Ireland can be set up with 7 members as a company limited by guarantee. This provides limited liability to the members and legal identity to the company. The company has to file audited accounts with the CRO at present but the proposal is when the Charity Regulator is established that accounts will have to be filed with the Regulator only.

As a charity you need to have an auditor whether the regulations require it or not in my opinion.

The main question is why do you want/need charity status, is it the Corporation Tax exemption. Is it for the Tax rebate on donations. A UK registration will provide neither.

In my view there are too many charities in Ireland doing the same/ similar thing all needing an office, admin staff, accountants auditors ect. Are you sure that you need charity status could you not just donate the profit to a registered charity. I've been through the process so if you want to chat PM.

househero

Alan Shore wrote: »

Are you proposing to set up a company in the UK apply for charity status in the UK and operate in Ireland?

Charities in Ireland can be set up with 7 members as a company limited by guarantee. This provides limited liability to the members and legal identity to the company. The company has to file audited accounts with the CRO at present but the proposal is when the Charity Regulator is established that accounts will have to be filed with the Regulator only.

As a charity you need to have an auditor whether the regulations require it or not in my opinion.

The main question is why do you want/need charity status, is it the Corporation Tax exemption. Is it for the Tax rebate on donations. A UK registration will provide neither.

In my view there are too many charities in Ireland doing the same/ similar thing all needing an office, admin staff, accountants auditors ect. Are you sure that you need charity status could you not just donate the profit to a registered charity. I've been through the process so if you want to chat PM.

Thanks for the reply Alan. Are you familiar with the UKs new Charitable Incorporated Organisation structure? You don't register as a business with companies house, then apply for tax exemption. Its very different to the uks old charity model and the one we are still lumbered with over here.

The charity, if set up in the UK, would "operate" in the UK. Benefitting people suffering from cancer in Ireland.

The proposed charity will operate an internet radio station, the well known and respected djs have agreed to broadcast and supply their services for free. The station will be operated by knowledgeable volunteers (already in place). Worldwide donations, premium rate text lines (with people being clearly told the cost and his much goes to a good cause, we have found a few great companies offering increased revenue percentages for charities) and ad revenue will generate the money needed to benefit people suffering from cancer. It is proposed the charity will operate a UK based office (offered for a nominal fee of £1 per year, benefit from greatly reduced business rates) and run a server based in England to broadcast the station. And use the uks new CIO structure to maximise the donations and benefit to the people we want to help. There is no restriction on the CIOs 'directors' from being based outside the UK. BUT I'm not sure if the charity HAS to benefit UK citizens for the tax benefits to be applied... if they do, I don't see any problem in including northern Ireland. But I just want to be sure the beneficiary's in the republic won't change the organisations tax status.

I dont think there are too many charities, but there is not enough variety in the way a charity generates income, we are trying to address this issue and benefit people in need. I have run companies, but I am not explicitly familiar with operating a charity. One thing for sure is, we want to do it right, from the beginning.

Thanks for all your help

Alan Shore

Hi, I don't know anything about the UK code so can't comment on that.

I think it's great to see people people trying to diversify income streams, perhaps the term social enterprise is more suited than charity.

Best of luck with it.