The Church of England states the following
Registration with the Charity Commission – Parish ResourcesParish Resources
Registration with the Charity Commission
By the end of March 2031, all PCCs in England and Wales with an annual income over £5,000 must be registered with the Charity Commission. Between now and then, any parish that has an exceptional income of over £100,000 must register – they can no longer seek a written determination not to have to do this.
Do I have to register?
Is the church’s income over £100,000?
If the answer is ‘yes’, even if this is a one off (eg because of a legacy), you need to register with the Charity Commission.
Is the church’s income over £5000 but under £100,000?
Assuming your income remains at this level, you don’t need to register yet, but you will have to by the end of March 2031.
Is the church’s income under £5000?
Assuming this income remains unchanged, as guidance currently stands you will not have to register.
What issues will Churches face?
1. Registration with the Charity Commission
The first critical task will be registration with the Charity Commission. This requires you to clearly demonstrate your church’s public benefit and comply with specific legal obligations, which can be daunting.
2. Understanding and Implementing Accounting Standards
Transitioning to a charity means adopting strict accounting standards as stated in the Statement of Recommended Practice (SORP). Grasping the nuances of these regulations requires a significant investment in training and adjustments to your financial practices.
3. Independent Examination or Audit
As part of the accountability process, your charity’s financials need an independent examination or formal audit, depending on your income. Finding and appointing a qualified individual who could offer such services isn’t easy, we work with several churches so understand the requirements, we are independent examiners.
4. Governance Matters
Establishing a governing body that can effectively manage the charity while adhering to the principles of the Church of England is a test of balance and diligence.
5. Selecting and Training Trustees
Your trustees will carry considerable responsibility, hence the selection process is critical. Training them to meet the Charity Commission’s requirements is equally important to ensure they understand their legal obligations.
6. Compliance with Charity Law
Understanding and complying with charity law is a significant challenge, as there are distinct legal statutes that govern charitable entities, which often require specialist legal advice.
7. Creating a Reserves Policy
Developing a reserves policy is not merely a financial imperative but also a strategic one. This involves careful deliberation to ensure your church’s financial sustainability while being able to support ongoing and future projects.
8. Risk Management
Risk management is critical. Identifying, assessing, and mitigating risks related to financial, operational, and reputational aspects are areas to develop policies for.
9. Reporting and Transparency
Maintaining a high level of transparency through timely and accurate reports is essential for your credibility as a charity. Using modern software like Xero will be a must.
10. Data Protection and Privacy
Complying with data protection laws is another area where strict adherence was mandatory. As a charity, your handling of personal data has to meet the standards of GDPR and similar regulations.
If your Church needs help to prepare for Charity Registration or you need an Independent Examiner, please get in touch.
steve@bicknells.net
