OG531-2 Removing Charities from our Register: Inactive Charities

Last reviewed:
14 March 2012
Last updated:
9 March 2015

Policy Statement/Overview

All registered charities are required to provide us with information to keep their entry on the public Register of Charities up to date. Where charities fail to file accounts, Annual Updates and Annual Returns this may indicate that the charity has ceased to exist or does not operate.

We will remove such charities in certain circumstances (as set out in B2), unless:

  • they hold functional land;  
  • there has been a recent ongoing case with us in the last 3 months; or
  • we have regulatory concerns.  

Charities that are the subject of an ongoing case or regulatory action are not prevented from being removed from the Register. Whether or not they are removed will be decided by the circumstances of the case.

This guidance sets out the circumstances in which we decide from a failure to file the required information that a charity has ceased to exist or operate.

Guidance about charities applying to be removed from the Register can be found in OG531-1.

Summary of the guidance

Section B Casework Guidance explains what information charities must provide and what we must consider where they fail to provide it.

Section E highlights our legal obligation to keep a Register of Charities and our policy towards inactive charities.

Section F sets out the common questions about inactive charities.

Casework Guidance

B1 What information do we expect from charities and by when?

B1.1 Our information requirements

This table is a reminder of what information charities must prepare and what they must send to us. We can specifically request the information shown even where normally there is not a requirement for it to be sent (applies to charities with incomes of up to £25,000).

NB. All Charitable Incorporated Organisations (CIOs) must complete and send us an annual return, trustees' annual report and accounts. You can find more details in OG 718-8. 

Charity Income  What the charity must prepare   What must be sent to the Commission 
£10,000 or less *(see B1.2 below)
  • Annual Update
  • Trustees' Annual Report
  • Accounts (and provide copies on request)
  •  Annual Update 
Over £10,000 up to £25,000
  • Annual Return
  • Part A Charity Information
  • Trustees' Annual Report
  • Accounts (and provide copies on request)
  • Annual Return

 

  • Part A Charity Information
Over £25,000 up to £500,000
  • Annual Return
  • Part A Charity Information
  • Report on Serious Incidents (if appropriate)
  • Trustees' Annual Report
  • Accounts (and provide copies on request)
  • Annual Return
  • Part A Charity Information
  • Report on Serious Incidents or signed declaration that no serious incidents or other serious matters have occurred.
  • Trustees’ Annual Report
  • Accounts
Over £500,000
  • Annual Return
  • Part A Charity Information
  • Part B Financial Information
  • Report on Serious Incidents (if appropriate) 
  • Trustees' Annual Report
  • Audited accounts (and provide copies on request)
  • Annual Return
  • Part A Charity Information
  • Part B Financial Information
  • Report on Serious Incidents or signed declaration that no serious incidents or other serious matters have occurred.
  • Trustees' Annual Report
  • Audited accounts

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B1.2 The deadline for receipt of information

The deadline for getting information to us is ten months after the charity's financial year end. *Charities with an income of £10,000 have a legal requirement to keep their Register details up to date; they do this by filing an Annual Update. We ask these charities to present their Annual Update within the ten month deadline but this is not a legal requirement.  The legal requirement for such charities is the duty on the trustees in section 35(3) of the Charities Act to notify us if there is any change in the charity's trusts or its particulars as entered in the Register. The duty to notify us arises as soon as the change occurs. 

All charities are reminded of their reporting requirements as their filing deadline approaches and if they miss the deadline they receive a default notice. Their entry in the Register will also show that the documents are overdue.

A further series of reminders are sent at intervals during the next 6 months. They explain that failure to file the overdue documents may be evidence that the charity has ceased to exist or is not operating. If this is the case the charity may be removed from the Register. If it is not the case the charity should let us know immediately by filing the required information.  

Where no response is received by the end of the six month period we will consider whether the evidence indicates that the charity has ceased to exist or is not operating.

There are cases where the charity has failed to provide the required information for the last 3 years. In such cases we will send a reminder to the charity correspondent and named trustees. If we do not hear from the charity within 3 months of this reminder we will consider whether a decision that the charity has ceased to exist or is not operating should be made. Charities falling into this category should become fewer as time passes. 

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B2 The action we take if information is not received 

B2.1 Factors that may influence our decision to remove

Before we take any decision that a charity has ceased to exist or does not operate and should be removed from the Register we need to see if there are any factors that would prevent removal or cause us to look in more depth before removal. 

We will identify any charity where:

  • it might own functional property (usually land or buildings);
  • there has been a recent ongoing case (within the last 3 months). 

Both these factors indicate a potential activity within the charity and mean that it may not have ceased to exist or to operate. Therefore, we will not take removal action at this point.

Additionally, where a charity: 

  • has investment assets, or income over the last 2 years, in excess of £100,000;
  • has been the subject of a compliance case in the previous 2 years;
  • operates in a country listed in the FCO's priority country list;
  • operates in a country on the UK Financial Sanctions list;
  • operate overseas running schools, homes or orphanages. 

the case will be referred to Operations for more in depth scrutiny before a decision as to whether the charity has ceased to exist or is not operating is considered.

These issues require closer scrutiny because the charity has failed to meet its reporting and accounting responsibilities and are in line with the approach to risk and proportionality in our compliance work.

If none of the above criteria apply and there is nothing to indicate that the charity still exists or is operating, we will remove the charity from the Register and inform the last known correspondent.

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B2.2 Further action where the charity cannot be removed immediately

Operations will look in more depth to find proof of charity activity and potential risks to resources or beneficiaries for the charity referred. Operations will take additional steps to make contact.

Staff in Operations will:

  • attempt to contact the charity by telephone;
  • undertake open source research (ie news networks, internet searches, Land Registry searches, contact HMRC etc, to find evidence of the charity being operational);
  • examine previous contact/casework history with the charity to see if we are dealing with the correct people or whether anyone else can help us;
  • identify whether the charity is a company that has ceased to exist with unapplied assets - see section B2.3 below;
  • examine bank account details to find out where possible:
    • how much money the charity has in the account;
    • whether there has been any payments in or out of the account;
    • when the last transaction took place on the account;
    • the details of those who have access to charity money.

Some of these details may only be available directly from the bank and only where we have issued an Order under section 52 of the Act. An approach to the bank with a section 52 Order will be used only in exceptional circumstances and in strict accordance with conditions for its use set out in OG117-6.

 

Next steps will depend on whether:

  • anyone who represents the charity can be found;
  • the charity holds land or functional property;
  • the charity holds money, investments or other assets;
  • there has been recent activity on the charity bank account;
  • there is any indication or suspicion of misconduct or mismanagement in dealing with the charity's property.

Possible actions as a result of this stage may include:

  • removal from the Register where it can be shown that the charity has ceased to operate, has no functional or other assets and there is no suspicion of misconduct or mismanagement;
  • provision of advice and guidance on trustee responsibilities and how to formally wind up the charity where we have tracked down trustees but do not consider there is any misconduct or mismanagement;
  • case referral to Operations:
    • to appoint new trustees, make Orders to release assets to another charity or make schemes as appropriate to provide new administrative provisions to better manage the charity's assets; or
    • to consider suspicions of misconduct and mismanagement that have been uncovered by this action.

Cases referred to other casework divisions will be looked at in line with our Risk Framework and may result in regulatory compliance action or, where suspicions are unfounded, the charity can be removed from the Register or passed to another unit for guidance or specialist action.    

bewareThe decision to remove a charity from the Register can be appealed at the First Tier Tribunal (Charity). Where an appeal is brought we must show that we have taken reasonable steps to contact the trustees or those with knowledge of the affairs of the charity before deciding that the charity has ceased to exist or was not operating and so should be removed from the register. Therefore, it is important to record all steps we take to contact the charity and be able to show the basis for our decision to remove the charity from the Register. If it becomes clear that the charity does still exist and is operating, it should be restored to the Register. 

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B2.3 Particular issues that concern charitable companies

Inactive charities may also include those that are charitable companies that may have been struck off the Companies Register which have unapplied assets. Our interest in these charities would be to make sure that charitable assets should be applied for charitable activity and not be lost. Because of company law those assets may become vested with the Crown, the Duke of Cornwall or the Duchy of Lancaster. The assets are called "bona vacantia", translated as "ownerless goods". Action may be needed to retrieve these assets so they can be used for their proper purpose. The legal position about charitable companies is explained in OG531-1 E2.2, section E2.3 explains what might be done to retrieve assets. 

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Legal/ Policy/ Accountancy Framework

E1 Removal of defaulting charities from the Register

Registered charities are required by law to send us particular information on an annual basis (set out in section B1 of this guidance). Where a charity fails to submit this information we will take action as set out in section B2. This may lead to a charity being removed from the Register on the basis that it has ceased to exist or is not operating.

E1.1  The legal requirements for us to keep a Register of Charities

Section 29 of the Charities Act sets out our legal duty to keep and maintain an accurate Register of Charities. OG531-1 section E1.1 sets out these legal requirements in more detail. It also explains about removing charities that cease to exist or do not operate and what we mean by these terms.

E1.2 Our policy on follow up and removal 

A charity failing to send its required information to us will be considered to be in default of its legal obligations. Where this happens we will consider whether the reason for the failure to submit the information is because the charity has ceased to exist or no longer operates. If we decide that the charity has ceased to exist or does no longer operates, we will take steps to remove inactive charity details from the Register.

  • Charities have ten months following their financial year end to submit their information to us.
  • Charities that fail to submit their information are given a further 6 months to produce the information, to show they are still active, before we consider whether they have ceased to exist or are not operating and so should be removed from the Register.
  • Charities that are in a position where they have not supplied the required information for 3 years will have 3 months beyond the financial year end to produce the information before we decide whether they have ceased to exist or are not operating.  

Being removed from the Register is not a penalty or punishment and charities are reinstated if they provide evidence that they are still active. Wherever possible we ask charities to submit information to us online.  

E1.3 Human Rights Act 1998

In taking removal action we conform to the principles of Article 1 of the First Protocol for the protection of property.

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Q&A

F1 What is an inactive charity?

This is a charity which is found to have ceased to exist or to be no longer operating. The first indicator of this is usually where the charity fails to supply required information to us in the form of Annual Updates, Trustee Annual Report or charity accounts. See section E1

F2 What information are charities required to send us?

The information we require is determined by income level see the table in section B1.

F3 Do we remind charities that have failed to file information with us?

We issue reminders as the filing deadline approaches and notify charities that fail to meet the deadline. This is set out in detail at section B1.2

F4 What action do we take when we have charities fail to send us the required information?

This will depend on the circumstances surrounding the charity. Our action is set out in section B2.

F5 Do we notify an inactive charity if it has been removed from the Register?

Yes we do, we write to the trustees using the charity's correspondence address.