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Thousands of UK's smallest charities to benefit from reduced regulation

15 March 2007

Up to 38,000 small charities will be able to opt-out of registration with the Charity Commission, under the latest element of the Charities Act to come into effect – potentially saving the equivalent of £1.3 million in staff or volunteer time.

An estimated additional 20 hours of trustee time could also be saved for each of the 1,500 new small charities that are set up each year, which will no longer be required to register.

Currently, most charitable organisations with an annual income of over £1,000 a year must register with the Charity Commission. The 2006 Charities Act has raised that threshold to £5000 annual income.

There are roughly 38,000 charities with an income between £1,000 and £5,000. Those organisations can now choose to opt out of the requirements that come with registration – principally preparing annual reports. It is estimated that the total potential time savings – freeing up staff for other activities – are equivalent to £1.3 million per year.

Presently, every year approximately 1,500 charities with annual incomes below the new £5,000 annual income threshold register for the first time. With these new changes, the total potential time saving for those organisations is estimated by the Charity Commission as being 20 hours of trustee time – the equivalent of £500,000 saving per year.

Any charities already registered which fall below the new threshold are free to choose whether to de-register. However, all charities will remain within the regulatory jurisdiction of the Charity Commission whether registered or not.

In addition to raising the threshold, a current requirement for small charities to register if they hold permanent endowment, or use or occupy land, will be removed.

These changes have been made by an order under the Charities Act 2006 laid before Parliament on 15 March 2007, and which will come into effect from 23 April 2007.

Further changes to the rules for registration are still to be made under the Charities Act 2006. Details of these can be found in the Charities Act 2006 Implementation Plan [PDF 71KB,5 pages] from our website