Setting up a charity or charitable incorporated organisation (CIO) in England and Wales means registering with the Charity Commission, not Companies House. This guide covers structure choice, the registration process, the separate HMRC recognition step that founders most commonly miss, and your first-year compliance calendar.
When you must register: the £5,000 threshold and the CIO rule
A charity based in England or Wales must register with the Charity Commission once its annual income exceeds £5,000. A charitable incorporated organisation (CIO) must register whatever its income, even if it has not yet received a penny. These are the two core rules founders need before doing anything else. See the Commission's registration guidance (CC21b) for the full criteria.
Below £5,000 a year, a non-CIO charity can operate unregistered, but it will not appear on the public register, cannot use the Commission's charity name protection, and cannot access Gift Aid until it registers and obtains HMRC recognition separately (see section 5).
There are excepted and exempt categories of charity (certain churches, armed forces charities and others) that sit outside the standard registration route. The rules are complex and specific to the organisation type; the Commission's guidance is the right place to check whether an exception applies.
Choosing a structure: CIO, charitable company, unincorporated or CIC
The four common vehicles for social-purpose organisations in England and Wales are the CIO, the charitable company limited by guarantee, the unincorporated association or trust, and the community interest company (CIC). The right choice depends on whether you need charitable status, whether you want limited liability, and how much administrative overhead you can absorb.
| Structure | Charity status | Limited liability | Where it registers | Annual filings |
|---|---|---|---|---|
| CIO (charitable incorporated organisation) | Yes | Yes | Charity Commission only | Commission annual return + accounts |
| Charitable company (limited by guarantee) | Yes | Yes | Charity Commission and Companies House | Commission annual return + accounts and Companies House confirmation statement + accounts |
| Unincorporated association or trust | Yes (if eligible) | No (trustees personally liable) | Charity Commission (if income > £5,000) | Commission annual return + accounts |
| CIC (community interest company) | No | Yes | Companies House only | Companies House accounts + CIC34 report |
The structure comparison tool for your situation is queued for this site (launching later). In the meantime, the Commission's structure guide sets out the full comparison.
A CIC is not a charity. CICs receive no Gift Aid, no charity rate relief, and pay corporation tax normally. If tax reliefs matter to your model, a CIC is the wrong vehicle. See our CIC complete guide and the comparison article CIC vs charity for a fuller treatment.
What a CIO is and why founders pick it
A charitable incorporated organisation (CIO) is a legal form created specifically for charities by the Charities Act 2011. It gives trustees limited liability (the organisation, not the individuals, owns assets and enters contracts) without the dual-registration burden of a charitable company. A CIO registers only with the Charity Commission; a charitable company must register with both the Commission and Companies House and file accounts in two places every year.
There are two CIO models: the association CIO (members separate from trustees, suited to membership organisations) and the foundation CIO (trustees are the members, suited to grant-making or service-delivery bodies with no wider membership). The choice affects governance but not the registration process.
CIOs are the most popular structure for new mid-size charities precisely because they combine liability protection with a single regulatory relationship. The main trade-off is that CIOs cannot issue shares (relevant only if equity investment is part of the plan, which makes a CIC or charitable company the better fit).
The registration process
Charity Commission registration is an online application. The steps are broadly:
- Draft a governing document. For a CIO this is the constitution (using one of the Commission's model constitutions is strongly recommended). For an unincorporated association it is the rules; for a charitable company it is the articles.
- Confirm your charitable purposes. The purposes must fall within the list in the Charities Act 2011 and be for public benefit. The Commission's published guidance on public benefit is the test to apply.
- Appoint at least three trustees. Trustees must be 16 or over for a CIO (18 or over for most other structures). They cannot be disqualified under the automatic disqualification rules.
- Submit the online application. You will need your governing document, details of trustees, and evidence of income or credible plans to exceed the registration threshold (or confirmation you are forming a CIO).
- Wait for a decision. The Commission does not publish processing-time guarantees. Applications that are complete and straightforward are decided faster; complex purposes or unusual governing documents take longer.
The Commission publishes model constitutions for both CIO models. Using a model significantly reduces the back-and-forth during assessment.
HMRC recognition: the separate step founders miss
Commission registration does not give you Gift Aid or other charity tax reliefs. HMRC recognition is a separate application, and Gift Aid claims, exemption from income and corporation tax on qualifying income, and charity rate relief all depend on it. You can apply to HMRC once you have your charity registration number from the Commission.
The HMRC application asks for your registration number, governing document and bank details. Most straightforward charities receive recognition within a few weeks, though HMRC does not guarantee a timeline. Until recognition is granted, do not process Gift Aid declarations: you cannot make a valid claim without it, and declarations collected before recognition cannot be retrospectively used.
See our charity accounts service for help managing your first filing obligations once recognition is in place.
Your first-year duties: annual return, accounts and deadlines
Once registered, every charity has annual compliance obligations regardless of size. The key obligations in year one are:
- Annual return: All registered charities must submit an annual return to the Commission within 10 months of the financial year end. What you file is tiered by income: under £10,000 you report income and spending only; £10,000 to £25,000 you answer the annual return questions; over £25,000 you also attach the trustee annual report and accounts.
- Accounts: Charities below £250,000 gross income (£500,000 for financial years ending on or after 30 September 2026, and not a company) may prepare simpler receipts and payments accounts. Above that threshold, and all charitable companies, must prepare accruals accounts under the Charities SORP.
- External scrutiny: Once gross income exceeds £25,000 (£40,000 for financial years ending on or after 30 September 2026), an independent examination or audit is required. At or below that gate there is no statutory external scrutiny requirement (though your governing document may impose one).
- Trustee annual report: A narrative report from the trustees is required for charities over £25,000; smaller charities include a simpler report in their annual return.
See our annual return guide for a step-by-step walkthrough of what to include.
When a charity is the wrong vehicle
A charity is not always the right answer. Consider a CIC or a conventional limited company if:
- Your primary purpose is trading profit rather than public benefit (a charity's assets are locked to its purposes; you cannot extract profit as a shareholder).
- You need to raise equity investment (charities cannot issue shares; a CIC limited by shares can, subject to the statutory dividend cap).
- Your purposes do not meet the public benefit test (social enterprise activity alone is not enough).
- You want to pay trustees for their trustee role (permitted only in specific circumstances with Commission approval; paying trustees for separate employment or services is different and possible).
If social enterprise without charitable status is the better fit, read our CIC complete guide and the CIC vs charity comparison.
Scotland and Northern Ireland: different regimes
This guide covers England and Wales only. Scotland and Northern Ireland have separate legal frameworks and separate regulators.
Scotland: Scottish charities are regulated by OSCR (the Office of the Scottish Charity Regulator), not the Charity Commission. Registration thresholds, account scrutiny rules and annual reporting requirements differ from England and Wales. If your charity operates primarily in Scotland, or was established under Scots law, OSCR is the correct starting point. Do not assume any threshold or rule on this page applies in Scotland.
Northern Ireland: The Charity Commission for Northern Ireland (CCNI) is the regulator for charities constituted or operating in Northern Ireland. Again, separate rules apply.
A charity that operates across borders may need to engage with more than one regulator. The Commission's guidance covers cross-border charities that are primarily based in England and Wales but have some activity elsewhere.
Frequently asked questions
What level of income requires charity registration?
A charity based in England or Wales must register with the Charity Commission once its annual income exceeds £5,000. Below that threshold, registration is optional (unless you are forming a CIO, which must register at any income level). See CC21b for the full rules.
Does a CIO have to register whatever its income?
Yes. A CIO must register with the Charity Commission regardless of income, even if it is newly formed and has received nothing yet. This is the rule that distinguishes CIOs from other charitable structures.
What is the difference between a CIO and a charitable company?
Both give trustees limited liability, but a CIO registers only with the Charity Commission, whereas a charitable company must also register with Companies House and file accounts and a confirmation statement there every year. For most new charities, the CIO's single-regulator model is simpler and cheaper to run.
Do I register with Companies House or the Charity Commission?
For a CIO or unincorporated charity: the Charity Commission only. For a charitable company: both. For a CIC: Companies House only (CICs are not charities). See the Commission's structure guidance.
How do we get Gift Aid after registering?
Commission registration alone does not give you Gift Aid. You must apply separately to HMRC for recognition as a charity. Only once HMRC grants recognition can you validly collect Gift Aid declarations and make claims. Apply to HMRC as soon as you have your Charity Commission registration number.
What is the annual return deadline?
The annual return must be submitted to the Charity Commission within 10 months of the end of the financial year. All registered charities must file; what they include is tiered by income.
Can a charity have paid trustees?
Trustees normally act unpaid. Paying trustees for their trustee role requires Charity Commission authorisation (either explicit or via a specific power in the governing document, which the Commission's model constitutions do not include by default). Paying trustees for separate employment, or for services under a properly managed contract, is different and can be permitted under the right conditions. Take advice before paying any trustee.
Should we set up a charity or a CIC?
Choose a charity if your purposes are charitable (public benefit, not just social good) and you want Gift Aid, rate relief and tax exemptions. Choose a CIC if you want to trade with a social purpose but your purposes are not strictly charitable, or if you need to pay dividends or raise equity. See the CIC vs charity comparison for a fuller treatment.
Do Scottish charities register with the Charity Commission?
No. Scottish charities register with OSCR, not the Charity Commission. The rules, thresholds and processes are different. This guide covers England and Wales only.