Posted by Alan Hakim, Natuional Treasurer on April 21, 2001 at 17:05:02 from 195.44.2.23:
In Reply to: Is TARS a Charity? posted by Alex Peal on April 18, 2001 at 17:07:25:
My apologies for not joining in this sooner, but I have been away for a week (and shall be away for another week from tomorrow, so don't expect a quick reply to any response you make to this). I have also taken the liberty of answering the very first question, since if I went to the correct place at the bottom of the thread, I should be so far out on the right wing some people's browsers might not make it clear I had joined in.
Most points have already been answered in the course of this thread, but to summarise a few key items:
- TARS is not a charity.
- Gift Aid is only applicable to donations (including subscriptions) to registered charities. Therefore it is no use making a Gift Aid declaration for TARS.
- Deeds of Covenant are effectively dead in UK Tax practice now, except for those that haven't been replaced by Gift Aid, and need to work out their time.
- On the other hand, TARS Ltd has educational objects, and is therefore able to claim exemption from VAT for some of its activities. The Literary Weekends are the most obvious example.
- If you are registered as a charity, there are strict limits on the activities your organisation can promote. This is why many charities run a trading company. Ted's stall would have to be treated that way if TARS registered as a charity.
- Accounting in a format acceptable to the Charities Commission would not be a problem.
- The National Committee looked into the question of registration in the early years, and decided that charitable status would limit the society's activities too much. True, we should get some tax remission, but the inhibitions on society activities might make us a less attractive society to join.
Nothing I have learned since taking over as Treasurer gives me any reason to change the original committee decision. However, as some members know, the Development Committee have recently recommended that we revisit thequestion. This will be done.
There is another approach which is much less restrictive. If we wanted to set up a fund for definite charitable purposes, we could start a Charitable Trust to run it. The Trustees would be legally independent of TARS, even though some might be TARS Trustees too, and the income and expenditure would be kept separate from TARS' money. In that case, the fund would be looking for Gift Aid declarations, and could increase its income substantially by reclaiming the tax.
Finally, my apologies to our Tarsus, Austars and other overseas readers, who are probably not interested in the details of British taxation. However, from the remarks of Tarsus members, it does appear that the US 501(c)3 practice is much less onerous than UK charitable status.