Choose the appropriate business type for a charity

This article explains which business type to choose when you’re setting up a FreeAgent account for a charity, not-for-profit organisation, social enterprise, community interest company (CIC) or charitable incorporated organisation (CIO).

You can also apply for a charity discount if your business is eligible.

If you have a business account with Mettle, find out how to set up a new Mettle-funded FreeAgent account.

This article contains the following topics. Select a link to skip straight to that section:

• Choosing a business type
• When to choose a Universal account
• Choosing a business category
• Charity discount

Choosing a business type

If your charity is one of the following business types, select it as the business type for your FreeAgent account:

• UK Limited Company - please see details below for community interest companies (CICs) and Charitable Incorporated Organisations (CIOs)
• UK Limited Liability Partnership
• UK Partnership
• UK Sole Trader
• UK Unincorporated Landlord

If you don't require some of FreeAgent's more detailed bookkeeping functionality, you might want to choose the Universal option for a charity.

When to choose a Universal account

Universal accounts can be used for UK or international businesses and charities.

Universal accounts don't include some of the complex functionality that other business types require, such as VAT, payroll, Self Assessment, Corporation Tax or preparing accounts using cash basis accounting. If you do require any of this functionality, choose one of the other business types listed above.

Before choosing a Universal account, please consider the following:

Paid employees

If your charity has paid employees, don’t choose a Universal account as this doesn’t include payroll functionality, and choose one of the other business types listed above.

VAT

If your charity is registered for UK VAT and you want to file your VAT returns using FreeAgent, don’t choose a Universal account as this doesn’t include VAT functionality, and choose one of the other business types listed above.

Charitable companies

If your charity is also a limited company registered at Companies House, choose the UK Limited Company business type.

Community interest companies (CICs)

If you run a community interest company (CIC), you can use the UK Limited Company business type for your company’s day-to-day bookkeeping, but you won’t be able to use it to file your statutory accounts and company tax return as FreeAgent doesn’t support form CIC34.

Charitable Incorporated Organisations (CIOs)

Similar to a CIC mentioned above, you can use the UK Limited Company business type for your company’s day-to-day bookkeeping, however you will have to file your accounts with the Charities Commission outside of FreeAgent as this is not supported by FreeAgent. In addition, you may need to file your CT600 with HMRC if required outside of FreeAgent.

Unincorporated association

If you’re running an unincorporated association and have monthly paid employees or need to file VAT, choose the UK Sole Trader business type. If neither of these apply to you, select the Universal account.

Cash basis accounting

If you want to prepare your accounts using cash basis accounting and create invoices and bills rather than just explaining your bank transactions directly from the Banking section of FreeAgent, don't choose a Universal account. Choose a Sole Trader or Partnership business type instead.

Choosing a business category

If your business is a charity, not-for-profit organisation, social enterprise, community interest company (CIC) or charitable incorporated organisation (CIO), select ‘Charity/NFP/CIC' from the ‘Business Category’ drop-down menu.

Charity discount

FreeAgent currently offers a 50% discount on FreeAgent subscription costs for registered charities. Discounts will also be considered on a case-by-case basis for not-for-profit organisations, community interest companies (CICs), charitable incorporated organisations (CIOs) and social enterprises that have a mission to benefit their community and have clear social objectives.

To check whether your organisation is eligible for the discount, please email support@freeagent.com and provide either your registered charity number or further information on what your not-for-profit organisation, community interest company or social enterprise does for the community.

If you have a website for your organisation, please also provide a link to this in the email. A member of our Support team will assess whether your business is eligible for the discount and, if so, will apply it to your FreeAgent subscription.