How to Start a Charity Shop in London, UK: Procedure, Documents Required, Cost, What type of License to obtain?

Procedure to Start a Charity Shop in London

The process of forming a charity involves six steps.

1. Find new trustees to establish a framework for recruitment and the procedures for selecting, appointing, and orienting new charity trustees.

2. Your charity needs to be “for public benefit” or to have “charitable purposes” that benefit the general population.

• relieving poverty
• education
• religion
• health
• saving lives
• citizenship or community development
• the arts
• amateur sport
• human rights
• religious or racial harmony
• the protection of the environment
• animal welfare
• the efficiency of the armed forces, police, fire or ambulance services

3. The “main name” of your charity is its formal name. Additionally, your charity might go by a “working name,” which is an alternate name.

4. For a charity, you need to decide on a structure that will impact items like who is in charge of the charity. The manner in which the charity is managed and its capabilities, such as hiring staff or possessing assets.

5. For your charity, you must draft a “governing document” (sometimes known as a “rulebook”) outlining the procedures for running it. Trustees and other interested parties can access your governing document to learn more.

6. Register your charity if Its annual income must be at least £5,000, or it must be a charitable incorporated organization (CIO) with its headquarters located in Wales or England.

Documents Required

• Governing Document: This outlines your charity’s purpose, structure, decision-making process, and rules for trustees. The format depends on your chosen structure (unincorporated association, trust, charitable company). Refer to the Charity Commission for specific formats and guidance.
• Charity Registration Application: Required if your annual income exceeds £5,000 or you are a Charitable Incorporated Organisation (CIO). Submit this to the Charity Commission with supporting documents like your governing document and financial projections.
• Lease Agreement: Secure a suitable retail space and finalize the lease agreement with the landlord.
• Insurance Policies: Obtain necessary insurance for public liability, employers’ liability, stock, and property damage.
• Safeguarding Policy: Mandatory if you work with children or vulnerable adults. Develop policies and procedures to ensure their safety and well-being.
• Financial Records: Maintain meticulous records of income, expenses, donations, and grants.

What is the cost of starting a charitable shop?

• A minimum of £5,000 to cover the security deposit.

What type of License to obtain?

1. Business Rates: Every commercial property in the UK incurs business rates payable to the local council. Register your shop with the Valuation Office Agency to determine your rate.
2. Waste Management License: Obtain a waste management license from your local council if you plan to dispose of commercial waste beyond basic household-like amounts.
3. Music Licensing: If you play music in your shop, you’ll need a license from PPL PRS Ltd or similar organizations to cover public performance royalties.
4. Selling Second-Hand Goods: While a specific license isn’t typically required, some councils have regulations related to second-hand goods, including displaying product information and safety notices. Check with your local council for specific requirements.
5. Selling Food or Drink: If you plan to sell food or drink on-site, you’ll need a food business registration and potentially comply with additional regulations depending on the type of food you sell.