Charity status

Wikimedia UK's constitution establishes us as a not-for-profit company limited by guarantee. This means that the income and assets of the chapter can only be used to pursue our objects, and that the board members and members cannot receive any personal benefits over and above the benefits given to other beneficiaries.

When we were formed, obtaining full UK charitable status was identified as one of the key objectives. The advantages of charitable status were identified as:

• It adds to our reputation, meaning that people are more likely to donate, join, partner with us and take our views seriously
• We can claim Gift Aid income tax relief
• We can get reduced costs for other services including PayPal and room hire

We drafted our constitution's Objects clause having regard to the Charity Commission's advice on the charitable activity called the "Advancement of Education".

Tax authorities application

We first applied for charitable status in November 2008 after we were incorporated and the Wikimedia Foundation's Chapters Committee had approved our constitution. As our confirmed annual income was less than £5,000 , we were unable to apply direct to the Charity Commission. However, we were able to apply to the UK Tax Authorities (HMRC), and ask them to recognise us for tax purposes.

At first, our application was delayed due to a backlog at the HMRC Charities Unit. We asked our MP to intervene to speed the process up, which he did, and we received a final response in April 2009. The response unfortunately rejected our application, arguing "The production of an encyclopaedia is not the charitable advancement of education"

We obtained informal legal advice and drafted a response addressing the case law raised by HMRC and giving examples of the projects' educational value to demonstrate compliance with Charity Commission guidance. The response was sent in June. However, in August they replied reaffirming their decision and refusing to refer the matter.

Direct application to the Commission

In the meantime, we applied to the Wikimedia Foundation for a £5,000 grant to help kick start the chapter's programmes. In July we were informed that this bid had been successful. We therefore immediately started drafting our direct Charity Commission application which was sent off to the Commission in September.

An initial reply was received from the Commision in April 2010. A firm of solicitors was hired to assist us in our response and discussions with the Charity Commission are ongoing. The eventual outcome of these discussions is not certain. However, we expect them to conclude one way or the other in time for our constitution to be changed at the April 2011 AGM.