What triggers a Charity Commission inquiry and what happens to us?

England and Wales: This page sets out the position in full. Scotland: not covered here — OSCR has its own investigations regime. Northern Ireland: not covered here either — CCNI has its own regime.

What does a Charity Commission inquiry unlock?

A formal statutory inquiry under section 46 unlocks the Charity Commission’s serious powers in England and Wales. If your charity is under scrutiny, this is usually the first thing to establish.

This page can be read on its own. Most charities arrive here after a serious incident or a filing problem. For those, see handle the aftermath of a report and fix a late or incorrect filing.

The boundary is a hard one, set by s.76(1) of the Charities Act 2011. It says the Commission’s protective toolkit under s.76(3) applies “at any time after it has instituted an inquiry under section 46“. None of these powers is available until a formal statutory inquiry has opened:

• suspending a trustee, officer or employee
• appointing an interim manager
• vesting property in the official custodian
• restricting the charity’s own transactions

Removing a trustee under s.79(4) also needs an inquiry first. The test is stiffer than for suspension, too. Section 79(3) requires the Commission to be satisfied of both limbs of s.76(1). Suspension needs only one.

One exception applies, and no summary of these powers should leave it out. Section 80 sits under the same “protection of charities” cross-heading. Yet it does not depend on an inquiry at all.

Under s.80(1) the Commission may remove a trustee “by order made of its own motion”. It may do so where the trustee has been discharged from bankruptcy, or from an arrangement with creditors, within the period s.80(1)(a) sets. It may also do so where the trustee is a corporation in liquidation, or is incapable of acting through mental disorder. The same applies where the trustee has not acted and will not say whether they will.

The Commission may also remove a trustee who is outside England and Wales, cannot be found, or does not act. That ground applies only if the absence or inaction impedes the charity’s proper administration. Under s.80(2) the Commission may appoint a trustee on the same own-motion footing. Section 80 needs an inquiry first only for an exempt charity (s.80(4)).

In short, the protective toolkit needs an inquiry. The administrative removal and appointment power in s.80 does not.

Which powers need no inquiry?

An official warning and a Commission-ordered audit need no inquiry. They are the powers most charities meet. Sector guidance tends to describe the dramatic powers that follow an inquiry and skip these two. For most readers, that is the wrong way round.

An official warning under s.75A needs no inquiry. The Commission can issue one, and publish it at its own discretion. It does so where it considers a trustee or charity has committed a breach of trust or duty or other misconduct or mismanagement. It first gives notice and a chance to respond.

A warning also matters later. Once an inquiry is open, failing to remedy a breach named in a warning is a ground for the protective powers (s.76(1)(a)).

A Commission-ordered audit under s.146 can be required even where no statutory audit was otherwise due (s.146(1)(b)). Where the Commission appoints the auditor, the trustees are personally, jointly and severally liable for its cost under s.146(3)(a). The Commission recovers it from them, or from the charity’s funds where that is not practical (s.146(3)(b)).

Trustee liability more generally is covered in am I personally liable as a charity trustee. For a charitable company whose accounts must be audited under the Companies Act 2006, the equivalent power is in s.147, and there the Commission itself meets the cost.

Disqualification and removal from the register

Two things are often described as results of an inquiry, but neither is. Disqualification under s.181A is free-standing, with its own three-part test. Who is disqualified, and how to check, is covered where you check every trustee’s eligibility. It does not require an inquiry to have opened at all.

Removal of a charity from the register is a register-accuracy duty. Under s.34, the Commission must remove a charity that has ceased to exist or does not operate. It is not something an inquiry itself hands down.

The non-filing ladder: the route most charities meet

Most charities that meet the Commission’s formal process meet it here, after a missed deadline to file your accounts, not through anything more dramatic. The published sequence runs like this:

• reminders, with the register entry showing documents outstanding
• a final written warning with a compliance deadline, at the pre-inquiry stage
• inclusion in the double defaulter statutory class inquiry under s.46, for charities in default for two or more of the last five years
• information orders and directions, used inside that class inquiry
• one of three outcomes: compliance and exit, removal from the register, or referral to a separate named inquiry

Most charities comply at this stage. In the published figures for the most recent double defaulter inquiry, 36 charities complied and continued. By contrast, 8 were referred on to a separate inquiry. Across the whole cohort, information orders were used 78 times and directions 130 times before that.

A pre-inquiry warning letter reads like another reminder. It is the last step before the class inquiry. Most charities that receive one respond rather than let it run.

What moves a compliance case into a formal inquiry?

No published method says exactly when the Commission stops asking questions and opens an inquiry. That is the gap named in the answer at the top of this page.

The Commission’s own published decisions show a pattern, though not a stated rule. Failing to engage with the Commission in substance is named directly, on its own, as a ground for escalating. These factors also recur alongside it:

• serious safeguarding concerns, which tend to escalate by their nature
• several issues in combination — safeguarding, financial viability and governance together, rather than any one alone
• repeated non-filing paired with a refusal to review accounting processes
• continuing unauthorised payments after advisers have already said to stop

This is a reading of past published decisions, not a rule the Commission has stated. It says nothing about how any particular case will go.

The governance record those answers draw on is the one built when you assess yourself against the Charity Governance Code.

This is the last page in this part of the guide. If the Commission’s letter is about a missed or wrong filing, the practical work starts where you fix a late or incorrect filing.

Common mistake: ignoring a pre-inquiry warning letter

A pre-inquiry warning letter reads like another reminder. It is the last step before a statutory class inquiry. Most charities comply once they receive one: the published counts are in the section on the non-filing ladder.

Worked example

The Commission’s own published inquiry into the Birmingham Education Trust shows the sequence in a real case:

• repeated use of its information-gathering power
• two directions ordering specific action
• suspension of both trustees under s.76(3)(a) on 29 March 2022
• their removal under s.79(4) on 2 August 2022, with automatic disqualification following under s.178

Every step in that sequence came after the inquiry had opened. None of it was available before the inquiry opened.