Charitable status for IPS Community Benefit Societies

Industrial and Provident Societies (IPS) co-operative societies cannot generally be charitable. IPS community benefit societies (Bencom) may or may not be charitable, depending on their objects and the extent to which they provide public benefit.

Charitable IPS community benefit societies (Bencom) are currently classed as exempt charities under the Charities Act 1993. This means that they enjoy charitable tax breaks such as relief from income tax, corporation tax and capital gains tax, exemption from inheritance tax and relief from business or non-domestic rates, but they are not required to register with the Charity Commission since they are regulated by the Financial Services Authority.

However, under the Charities Act 2006, charitable IPS community benefit societies will be obliged to register with the Charity Commission if they wish to be charities and receive charitable tax breaks. At the time of writing this provision is expected to come into force in late 2010.