Frequently Asked Questions

Find answers to the questions we're most often asked by charities, the public and other organisations.

Setting up a charity can be very rewarding but also a lot of work. Voluntary organisations don't have to be charities to carry out charitable activities or do fundraising, as long as you don't claim to be a charity. If you are thinking of setting up a charity you should think carefully about the advantages and disadvantages for your organisation before making a decision. Another option is to consider working with an existing charity in your chosen field.

If you do become a charity you will have legal responsibilities, duties and restrictions. You will have to report to OSCR every year and provide accounts; give certain information to the public about what you do and how you do it.

Being a charity can give the public confidence in supporting you and may help encourage donors. It can also open up funding opportunites.

Find out more about becoming a charity.

The charity test is the legal set of requirements that an organisation must pass to become a charity and be entered in the Scottish Charity Register. The charity test is in two main parts:

  1. an organisation has to show that it has only charitable purposes and
  2. that it provides public benefit in achieving those purposes

Public benefit is what your organisation must provide to satisfy the Charity Test. We will need to be satisfied that your organisation will make a positive difference for the public.

The charity test also states that an organisation cannot become a charity, or continue to be one, if:

  • it is set up to be or advance a political party
  • its governing document allows it to use its assets (cash or property) for non charitable purposes
  • its governing document allows Scottish Ministers to direct or control its activities.

Find out more about the charity test.

The purposes set out in your governing document say what your organisation has been set up to achieve, and should reflect its broad aims. They should not be a description of the day-to-day activities that your organisation will do. To meet the first part of the charity test we should be able to easily see which of the 16 charitable purposes in Scottish charity law your organisation is trying to achieve.

A governing document (or constitution) is the document that sets up an organisation and says what its purposes are. It will usually deal with other matters, including who will manage and control the organisation, what their powers are, what they can do with the organisation's money and other assets, and membership of the organisation.

What your organisation's governing document is called and how it is put together will depend on what kind of organisation it is (what its legal form is). If it is a SCIO it will be called a constitution and must contain certain clauses. If it is a company the governing document is a memorandum and articles of association. If it is a trust the governing document will be a trust deed or similar document. If your organisation is an unincorporated association it may simply be called your constitution.

The Scottish Council for Voluntary Organisations (SCVO) has model governing documents for the different legal forms which will usually be acceptable to OSCR. There are also model governing documents for specific types of charities, like Playgroups or Housing Associations. If there is already a model available we recommend that you use that.

When choosing a name you should be careful that it is not 'objectionable' under charity law. Generally this means that is should not:

  1. Be the same as or too similar to an existing charity.
  2. Mislead the public about what your organisation is going to be doing.
  3. Give the impression that you are connected with another organisation (unless you are connected with them). 
  4. Be offensive.

If we think the name is objectionable we will contact you to tell you why. Ultimately if we can't resolve the name problem then we may have to refuse your application to be a charity. See our name change guidance for more information.

Once you've read the guidance and made the decision to apply to become a charity then you need to send us:

  • a completed application form,
  • signed Trustee Declaration forms,
  • your Governing document (a draft is fine),
  • where possible a Business Plan or similar document that tells us what you plan to do and
  • if you're already up and running a copy of your latest accounts.

See our application forms and guidance for more information.

No. It is free to apply and to register a charity.

We aim to assess applications to become a charity within 90 days and we will acknowledge the application within 10 days of receiving it. Sometimes, our assessment may take longer if the application is complex or we need to get more information. One of the most common reasons for applications taking time is because we don't have enough information at the start.

We can't help you set up a charity or decide if it's the right option for you but there are advice and support organisations that can. The main ones are your local Third Sector Interface (TSI) and the Scottish Council for Voluntary Organisations (SCVO).

Under Scottish charity law a 'charity trustee' is defined as the people in 'general management and control' of the charity.

Depending on the charity's legal structure they may also be known as board members, directors, office holders or committee members.

Whatever title your charity uses the people in 'general management and control' of the charity are classed as its charity trustees.

Everyone who is a trustee of your charity must be aware of their responsibilities and requirements under charity law. Even if your trustees have different roles within the charity, like Treasurer or Chairperson, they all have a shared responsibility under charity law.

There are specific duties that charity trustees must follow and general duties to act in the best interests of the charity. More information about charity trustee duties can be found here.

A SCIO must have at least three charity trustees as stated in the SCIO Regulations. For other legal forms, there is no legal number of charity trustees but it is good practice to have at least three.

Under Scottish Charity law you have to provide a copy of your governing document and a copy of the latest set of accounts if someone asks for these. The law also says that you must provide the documents in the form that the person has asked for (electronic, hard copy) unless this isn't a reasonable request. You can charge a fee for providing information, but it must not succeed the cost of providing the document(s). Many charities publish this information on their websites.

If you get a request for any other information, such as minutes of a trustee meeting, you don't have to supply it unless your governing document says you must. However, you can provide other information if you want to.

Specific information about your charity must by law be shown on certain types of documents.

Information Required Type of document
The charity's legal name (on the Register) business letters and emails
Any other name by which the charity is commonly known (known as name) adverts, notices and official publications
The charity's Scottish Charity Number allocated, which begins SC0 invoices, receipts and letters of credit
  educational, fundraising or campaigning documentation
  accounts and contracts

If your charity does not have the word "charity" or "charitable" in its name you must also state on the documents that you are a charity.

See our guide to find out more information..

Charities which set up trading arms or subsidiaries do so because this allows them to carry out commercial activities which the charity can't do. It is also a way of protecting the charity and it's assets from the risks associated with trading.

As a charity trustee you have a duty to act in the best interests of your charity and the decision to set up a trading subsidiary should be taken after getting appropriate professional advice.

We can't give you advice on whether you should set up a trading subsidiary or how to do this, but there are organisations which can. The main ones are the Scottish Council for Voluntary Organisations (SCVO) and your local Third Sector Interface.

You must update our online services or tell us within 3 months when:

  • your Principal Contact changes*
  • the contact details for the existing Principal Contact change*
  • you have changed your accounting year end date**
  • you change your governing document (unless the change is to the charitable purposes or the charity's name - this needs our approval first).
  • when any change consented to by OSCR is implemented.

Find out more on making changes to your charity.

*This should be changed straight away and can be done using our online services.

**You can do this by using our online services.

You must seek consent before making any of the changes listed below. You need to ask for our consent at least 42 days before you plan to implement the proposed change.

Changes that need our consent are:

  • changing the name of the charity
  • winding up the charity
  • amending the objects or purposes of the charity
  • amalgamating the charity with another body
  • changing the charity's legal form
  • applying to the court to change purposes, amalgamate or wind-up

You must apply to us and ask for our consent at least 42 days before you plan to change the name. When choosing a new name you should be careful that it is not 'objectionable' under charity law. Generally this means that it should not:

  1. Be the same as or too similar to an existing charity.
  2. Mislead the public about what your organisation is going to be doing.
  3. Give the impression that you are connected with another organisation (unless you are connected with them).
  4. Be offensive.

If we think the name is objectionable we will contact you to tell you why.

If we consent to the name change you will need to contact us again once the charity's name has been formally changed and give us any information we asked for when we gave consent.

See our name change guidance for more information.

You must apply to us and ask for our consent at least 42 days before you plan to change the charity's purposes.

You will need to send us a copy of your current governing document and a draft of the new purposes.

If we consent to the change to purposes you will need to contact us again once the purposes have been changed and give us any information we asked for when we gave consent.

Find out more information and application forms.

You must apply to us and ask for our consent at least 42 days before you plan to dissolve the charity. You must tell us what you plan to do with any assets the charity has left.

If we consent to the application you will need to contact us again once the charity has dissolved and give us any information we asked for when we gave our consent.

Find out more information and application forms.

If you want to continue your organisation's activity but don't want to be a charity any more, you can ask us to remove your organisation from the Scottish Charity Register and we will do this within 28 days.

If you are a SCIO this information does not apply. Please see our FAQs on SCIOs for further information.

Charity law requires us to monitor your assets after the date of removal, to make sure they are still used for charitable purposes. See our Former Charities Guidance for more information.

You do not need to tell us every time a Trustee changes, unless they are also the charity's principal contact.

Any Trustee changes should be included in your Trustees Annual Report.

SCIO stands for Scottish Charitable Incorporated Organisation. A SCIO is a legal form available to Scottish charities. A SCIO is a corporate body that can enter into contracts, employ staff, incur debts, own property, sue and be sued.

It provides a high degree of protection against personal liability for its charity trustees and provides reassurance for those entering into contracts with it. Unlike charities that are limited companies, SCIOs have OSCR as a single regulator.

SCIOs were created by the Charities and Trustee Investment (Scotland) Act 2005 as a new corporate legal form that would offer some protection to charity trustees from personal liability, but would not require them to have the same reporting and regulatory requirements as a company.

Unlike other forms of charities, the SCIO's existence depends on its charitable status. A SCIO does not exist until it is entered on the Scottish Charity register and if the SCIO is removed from the register it no longer exists. This is unlike other legal forms which can stop being a charity but still continue to operate as non-charities and it is an important point to consider before applying to become a SCIO.

The members of a SCIO have some of the same duties as charity trustees.

For further information read our guide on SCIOs.

Being a SCIO offers a degree of protection to charity trustees against personal liability which isn't found in unincorporated legal forms such as associations or trusts.

Companies limited by guarantee also offer this protection but charitable companies have extra requirements compared to a SCIO.

Companies that are also charities have to report to both Companies House and OSCR. Charitable companies must comply with company law as well as charity law. A company must prepare fully accrued accounts regardless of its size.

SCIOs are only regulated by OSCR and are subject to the same accounting thresholds as unincorporated charities.

There are some important differences in the duties and requirements of a SCIO compared to other charities. These include:

  • the qualifications, duties and powers of members;
  • the requirements for the SCIO to keep registers of its charity trustees and members and to provide copies of these registers;
  • the references to SCIO status in the charity's documents.

Our SCIO guidance sets out these requirements in detail.

You should think carefully about whether being a SCIO is right for your organisation. There are some important differences between being a SCIO and any other kind of charity in Scotland. OSCR's guidance sets out the key differences and this should help you in deciding whether being a SCIO is right for your organisation.

We can't help you decide if it's the right option for you but there are advice and support organisations that can.

The main ones are:

Under Scottish charity law organisations which represent themselves as charities in Scotland need to register with us.

This includes bodies which are established and/or registered as charities in other legal jurisdictions, such as England and Wales. There are some exceptions. For English and Welsh charities, further details can be found in our guidance notes Seeking charitable status in Scotland and cross border constitutions.

There are two types of charity accounts:

  1. receipts and payments accounts (R&P) - a simpler format of accounts for charities utilising cash accounting
  2. fully accrued accounts - more complex accounts

You will only have to prepare fully accrued accounts if one of the following applies:

  • the charity's gross income in the financial year is £250,000 or more
  • the charity is also a registered company
  • the charity's governing document says it should prepare accrued accounts
  • the charity's funders have asked for accrued accounts

Yes you can.

  • A charity can change its financial year end to any date as long as the new period does not exceed 18 months.
  • There are restrictions to the number of changes a charity can make in a 5 year period.
  • A charity can only have 2 periods which exceed 12 months in any 5 years.

A charity can only have 2 periods which exceed 12 months in any 5 years.

When a charity changes its legal form the original charity dissolves and the new charity is registered under its new legal form. The remaining assets of the original charity are transferred to the new charity as a separate organisation.

This transfer must be included in the new charity's accounts as income which may mean that the new charity's accounts will require a higher level of external scrutiny for that year.

The only exception to the above is where a limited company converts to a SCIO. In these circumstances the body continues and there is no transfer of assets.

Receipts and Payments Accounts (R&P) show all items which are received into and paid out of a charity's bank account(s). If the charity receives a loan this must be included as a receipt within the receipts and payments account for that year. When the loan is repaid this must be shown as a payment.

The outstanding balance on any loans should be recorded as a note in the statement of balances.

Receipts and Payments Accounts (R&P) show the transactions which pass through a charity's bank account. How an investment is recorded in the R&P will depend on whether the charity uses an investment broker or not.

Where a charity manages the investment directly via their own bank account then all the transactions going through the bank account will need to be reflected in the R&P accounts.

Where a charity uses a broker, the broker may buy and sell investments on the charity's behalf. Only the balancing figures would show in the charity's accounts as a receipt from or payment to the broker, because the investment transactions take place outside the charity's bank account.

Tax

For all questions about gift aid please contact HMRC directly.

Online services is our new electronic service that changes the way we work, and the way in which charities report to us. It provides a much shorter Annual Return which you file online, as well as make changes to some of your charity's information on the Scottish Charity Register - giving you greater control and making the process easier and accessible immediately. The public also benefits from an enhanced Register, with additional financial information about how larger charities spend their money.  

Our online service began in June 2012, with over half of Scotland's charities signed up. We began sending out our new, shorter Annual Return form from 1 April 2012. Over 16,000 charities now use the Online Services to submit returns and accounts, or make changes to their details.

If you expressed an interest, we sent you a User Name and Password by email in early Summer 2012. If you didn't express and interest, you can still sign up to our Online Services.

You already have a responsibility to the public to provide information, for example through your charity's accounts. Our changes simply make this information more readily available.

Lots of small charities just like yours are already enjoying the benefits of Online Services. But whether you've chosen to take part online, or prefer to continue with our paper processes, you still have a duty to report to us. Your charity will continue to operate as normal. All that's happening is an improvement of our systems to make it easier for you to report to us, and to provide the public with clearer information.

Eventually. Your charity will only be joining our electronic service if you've expressed an interest. We would rather that charities moved from paper to the new system.

Where the address held is a trustee's address, we are required to publish this along with the name of the principal contact. Where the address held is the principal office address, we are only required to publish this address.

If you already have login details for OSCR Online you can use these to access our database to make any updates to the principal contact for your charity. Remember, we will not be able to remind you of deadlines or events if you do not give us current and up-to-date information.

If you do not have log in details but are already registered, please contact us. If you are not already registered please register here.

Under Scottish charity law, your charity can campaign if:

  • it is advancing your charitable purposes
  • your governing document does not prevent the activity
  • you are not advancing a political party and,
  • you can show you are acting in the charity's best interests

Scottish charity law says that an organisation set up to be a political party or to advance a political party cannot become a charity.

Our position is that charities can campaign on political issues to advance their charitable purposes, including during electoral periods, as long as the requirements of charity law, and where necessary electoral law, are met.

Political campaigning - for example taking a position for or against a change in policy or legislation - is a legitimate way for many charities to achieve what they were set up for, their charitable purposes.

This means that Scottish charities can have purposes and carry out activities that seek to:

  • Influence government both central and local
  • Respond to, promote, oppose, or support legislation
  • Petition and otherwise seek to change public policy
  • Support a policy advocated by a political party (but not the party itself)

Charities can distribute information or engage in debate about the policies of political parties or candidates, where these activities are ways of achieving their charitable purposes.

While charities may choose to engage in political debate, trustees must make sure that this activity is in pursuit of the charitable purposes; and bear in mind the charity trustee duties to act in the best interests of the charity. This means that you must consider any potential reputational impact to the charity.

If you are campaigning with other charities, you will all need to make sure that the activities are consistent with each charity's purpose(s).

If you are campaigning with non-charities, you must make sure that they do not compromise your charity's independence by being associated with any political parties or politicians. You should think carefully about any campaigning with non-charities, how this might look to the public and how you can justify the activity as advancing your purposes.

Any activity a charity carries out should be in support of their charitable purposes and engaging with political parties and politicians is no different. The main point for charities to bear in mind is that they must be independent of party politics and should be seen to be independent as well. This applies to political parties and politicians anywhere in the world.

Engagement with political parties and politicians is a decision for the charity trustees, bearing in mind any potential reputational impact on the charity. Trustees should be aware of any conditions attached, for example being photographed for election leaflets or having election material displayed on the premises.

If you are organising hustings the general rule is to invite all the candidates unless there is a clear and objective reason not to. The Electoral Commission guidance sets out more points to consider if you are planning a hustings event.

Some charity trustees are also politicians and they should read our Who's in Charge - Control and Independence in Scottish Charities guidance.

In many cases, electoral law will not apply to the activities of charities in Scotland, but sometimes it will. Electoral law applies to spending on regulated campaign activity (some aimed at the public) during the regulated period.

If your charity spends or plans to spend more than £10,000 on regulated campaign activity in Scotland (or £20,000 in England, or £10,000 in either Wales or Northern Ireland) during the regulated period, your charity must register with the Electoral Commission as a non-party campaigner. Your spending includes your staff costs.

A. Regulated campaign activity means: an activity will be regulated if it is one of the activities listed in the table below and it meets either the purpose test, or the purpose and public tests depending on the activity.

Purpose Test only Purpose and public tests

- press conferences or other media events that your charity organises

- transport in connection with publicising your charity's campaign

- the production or publication of election material (such as leaflets, adverts and websites)

- canvassing and market research (including the use of phone banks)

- public rallies and public events

Spending includes staff costs for these activities.

B. The purpose test means: it's reasonable to think that the activity is intended to influence voters to vote for or against political parties or categories of candidates; including political parties or categories of candidates who support or do not support particular policies or issues.

C. The public test means: the activities are aimed at, seen, heard by or involves the public, or a section of the public. The public does not include members or committed supporters of charities.

D. The regulated period means: UK Parliamentary general elections usually have a regulated period of 365 days, ending on the day of the election. All other elections have a regulated period of four months, ending on the day of the election.

Your campaign activity to achieve something else, such as raising awareness of an issue, may meet the purpose test even if it does not name a particular party or candidate. For example, if you are campaigning on a policy that is closely and publicly associated with one or more political parties.

You should read the Electoral Commission guidance to find out if the rules apply to your charity.

The regulated period for the 2015 UK Parliamentary general election started on 19 September 2014 and will end on polling day 7 May 2015.

 

(1) The rules under the Transparency of Lobbying, Non Party Campaigning and Trade Union Administration Act 2014 started on 19 September 2014. This adds to the existing law the Political Parties, Elections and Referendum Act 2000 ("PPERA").

If your charity spends (or plans to spend) over £10,000 in Scotland or £20,000 in England on regulated campaign activities then you will need to register with the Electoral Commission and follow their rules.

If your charity produces printed election material, such as leaflets and posters, which meet the purpose and public tests, you must include an imprint. The Electoral Commission recommends that you also put an imprint on electronic election material, such as websites and emails. See the Electoral Commission guidance on imprints for more information.

Yes. You always have to comply with charity law and if your activities fall under electoral law, you must comply with that too.

If someone raises a concern about your charity and campaigning on political issues we will look at it in line with our Inquiry policy.

The Electoral Commission has advice on their website about what happens if they receive a complaint about a breach of electoral laws.

 

  • From the Electoral Commission:

They have a range of guidance on electoral law and non-party campaigners, which includes charities. Every year, they publish specific guidance for elections happening that year: non-party campaigner's guidance page.

  • From the Scottish Council for Voluntary Organisations (SCVO):

They have been analysing Electoral law and the potential affects on the third sector: www.scvo.org.uk 

  • From a charity law specialist:

If you plan to do a significant amount of campaigning in an election period then you might want to get independent legal advice: The Law Society of Scotland.