Guidance on UK charity banking

On 23 July 2024, the Charity Commission published guidance for charities relating to opening bank accounts.

This is a welcome piece of guidance as it is well-known in the sector that charities can often face an uphill battle to open a bank account.  Indeed, the guidance itself states that 42% of trustees surveyed in the Commission's annual 2024 trustee sector survey have experienced poor service from their banks in the last 12 months.

The guidance reminds trustees that all charities should have a bank or building society account in the charity's name to protect charity money and help to operate in a secure way, as well as it being a prerequisite for registering with HMRC for charity tax reliefs.

The Commission acknowledges that, in some cases, trustees have been asked to provide an excessive number of documents and information to banks with whom they are dealing.  If this happens, the Commission recommends that trustees direct banks to the Charity Commission's charity register which should assist them to verify information.

Charities should also remember to keep their details up to date, including changes to trustees, and to inform banks of any large or unusual transactions.

Finally, the Commission sets out helpful advice on how a charity can complain about a bank – by first complaining to the bank itself and then escalating to the banks' regulator, the Financial Ombudsman (where appropriate) or the Financial Conduct Authority.  Work is going at these regulators to try and improve access to,  and the quality of, banking services for charities.