Business, Charity or Non Profit?

twinkle456

Firstly, if this is in the wrong place or has been covered before, I apologize.

A shop has been set up locally that accepts donated goods for sale, apparently to run a food bank. They used to call themselves a charity shop, but have never registered & were told by the Charities Commission they could no longer refer to themselves as such or make the implication in their advertising. The staff are unpaid volunteers.

They are now calling themselves a 'not-for-profit' or 'non-profit organisation' & continue to solicit donated goods which they sell in their shop & on ebay.

Two local secondhand furniture businesses have had to close their doors since this person arrived. The (registered) charity shop that returns several thousand pounds per month into the community has been decimated. The local council don't want to know & have put on their website that this organisation is the official food bank for the area.

My questions:
1 - Is this a business or a Non-Profit?
2 - Should they have accounts available for inspection?
3 - Should they pay tax?

Can anyone clarify?

Thank you!

Robin9

Is this "Food Bank" listed on the Trussel Trust website?

Bipex

Twinkle: unfortunately, I don't have the requisite knowledge to help you, but I have heard of a number of similar occurrences and find these alleged "charity/not-for-profit" scams very infuriating. I hope someone will point you in the right direction.

Savvy_Sue

Robin9 wrote: »

Is this "Food Bank" listed on the Trussel Trust website?

Worth saying that not all Food Banks are under the Trussell Trust banner, although most are.

As for the OP's questions:

1 - Is this a business or a Non-Profit?

I'm not sure there's any legal distinction in the UK. If they don't make any profit - ie produce more money than they spend - then they won't last long, but that applies to registered charities too.

2 - Should they have accounts available for inspection?

If it's a limited company then yes, accounts should be available from Companies House. If it's not, and if it's not a registered charity either, then I don't believe there's any requirement to publish accounts.

3 - Should they pay tax?

Depends. If it's a ltd co, then corporation tax would be due on profits. If it's a partnership, then each partner in the business would do a tax return. If it's a one-man-band, then they'd do a tax return.

But actually, I'm quite surprised by this bit:

They used to call themselves a charity shop, but have never registered & were told by the Charities Commission they could no longer refer to themselves as such or make the implication in their advertising.

It actually takes quite a lot for the Charity Commission to intervene. and a charity does not have to be registered to say it is a charity or that it is operating for charitable purposes: what you can't do is claim to be a REGISTERED charity if you're not - but given that you have to make £5000 before you CAN register, some charities start small in the hope of growing.

One thing that's not clear to me is: are they actually running a food bank? Or are they making money to line someone's pocket?