Charity banking
Information on charity banking and the support available to charities trying to access adequate banking services.
Applies to England and Wales
Your charity should have a bank or building society account. This helps you protect your charity’s money and enables your charity to operate in a secure way.
It can also help with access to funding, and is needed to register with HMRC to get tax back on things like Gift Aid donations.
However many charities, particularly small and medium sized ones, have faced serious issues accessing adequate banking services.
Findings from our 2024 annual trustee sector survey reveal that 42% of trustees surveyed experienced poor service from their banks in the last 12 months.
Read this guidance for advice if you are struggling to get the services you need.
Opening an account
Charities should use their best efforts to set up a bank or building society account as soon as they can.
You should follow the steps in our guidance on internal financial controls for charities when setting up and holding an account.
Some providers offer ‘Community’ bank accounts which are open to unregistered charities and those in the process of registering with the Charity Commission.
UK Finance’s Voluntary Organisation’s Banking Guide provides detailed information on working out your banking needs, and about finding and opening an account. It also includes frequently asked questions and a best practice guide to maintaining your account.
We are aware of charities that have been asked to provide an excessive number of documents. Trustees are encouraged to direct banks to the Commission’s charity register if they request that you verify publicly available information on your charity.
Trustees should also speak to their banks if any requests are unclear or are not appropriate for your charity based on your legal structure. For example, if a charitable trust is informed by their bank that their trust deed or will is not a valid governing document this is incorrect as per Charity Commission guidance.
Further banking support
Keeping bank details up to date
To help to avoid issues, check regularly for correspondence from your bank. Keep your bank up to date and inform them of any relevant changes in your charity ahead of them taking place, for example as part of a handover to newly appointed trustees. Important updates include: - changes to trustee details - updates to authorised signatories to the bank account - any contact detail changes, such as change of address
This is because incorrect information can lead to delays accessing services from your bank, cause administrative difficulties or sometimes trigger a suspension of an account. We have been made aware by many charities that banks can be difficult to deal with on these issues once a suspension has occurred.
It is normal for charities income and expenditure to vary over the course of a year, for instance if you are making or receiving grants. The Commission has been clear that this is not an automatic indicator of suspicious activity. You should:
- inform your bank of any large or unusual transactions in advance
- allow plenty of time for overseas transactions
- share your due diligence processes with your bank, where proportionate
More detailed information on managing your account can be found in our guidance on Internal financial controls for charities.
Using the submission of your charity’s annual report can be a good reminder to keep your bank updated.
Charities moving money abroad
There are extra banking considerations for charities moving money abroad.
As well as our guidance on internal financial controls, trustees of these charities should follow guidance on:
- Holding, moving and receiving funds safely
- Charities: due diligence, monitoring and verifying the end use of charitable funds
- Compliance toolkit chapter 1: charities and terrorism which includes guidance on financial sanctions for charities and on designated individuals and entities.
Complaining about your bank
If you are unhappy with the service received, you should first follow your bank or building society’s complaints procedure.
If you are not happy with the response you receive, you can take your complaint to the Financial Ombudsman, as long as your charity’s annual income is below £6.5 million.
There may be times when the Financial Ombudsman cannot help. You can use its complaint checker and information on the types of complaints it can help with.
You can also take complaints about your bank to the Financial Conduct Authority (FCA). Charities can call the FCA on 0800 111 6768 or make contact via its website. The FCA is not able to resolve and respond to individual complainants. However, when the FCA receives a notable pattern of complaints then this can be raised with the bank in question.
Improving charity banking
The Charity Commission continues to press this matter following an open letter to all UK high street banks, issued alongside sister regulators in Scotland and Northern Ireland, which highlighted the substandard service charities receive.
The consequences of ongoing banking issues are very serious for a volunteer led sector, both in terms of time and support lost and governance risks.
We continue to engage with the Financial Conduct Authority, high-street banks, UK Finance and the wider sector, and will be reviewing the guidance to charities regularly.