Rules governing the registration and non-compliance of such not-for-profit entities are codified within the Charities and Non Profit Organizations (Registration) (Guernsey) Law, 2008. The law is separate from the Income Tax (Guernsey) Law, 1975, that governs profit entities, but is similarly administered by the Director of Income Tax in his capacity as the Registrar of NPOs.

NPOs under the Charities and Non Profit Organizations (Registration) (Guernsey) Law, 2008, as introduced in 2008, were required to register if they were based in Guernsey, Herm or Jethou, and had assets or funds of, or over, GBP10,000, or gross annual income of, or over, GBP5,000. An exemption exists for NPOs which are administered by a person licensed by the Guernsey Financial Services Commission (known as manumitted organisations). An additional exemption, was until now, allowed for NPOs based in Sark and Alderney, although the States has now announced following legislative reviews in both islands on the subject, registration is to be made compulsory in Sark (under its own legislation) and in Alderney (by extending provisions in the NPOs registration law to cover such entities operating in Alderney).

Other amendments made to the law governing NPOs relate to non-compliance. The 2008 Law introduced sanctions for non-compliance, but the States of Guernsey has announced that it is to introduce a number of new sanctions to allow the Registrar of NPOs greater flexibility when dealing with non-compliance. Previously sanctions available to the Registrar were limited to criminal prosecution, with a resulting substantial fine following conviction.

According to the States, this approach was considered to be somewhat excessive, given the fact that most NPOs are run by individuals who voluntarily give up their free time for worthy causes, and in the light of the relatively few number of NPOs who have failed to comply.

Under the new regime, the following sanctions will be introduced:

• Failure to register in accordance with Schedule 1, paragraph 2, will warrant a fine of GBP500;
• Failure to renew registration in accordance with Schedule 1, paragraph 5 –
  • For the first calendar month or part thereof, will warrant a fine of GBP20;
  • The second calendar month or part thereof, will warrant a fine of GBP40; and then,
  • Each subsequent calendar month or part thereof, will warrant a fine of GBP80.
• Failure to file annual financial statements in accordance with Schedule 1, paragraph 8 –
  • For the first calendar month or part thereof, will warrant a fine of GBP20;
  • The second calendar month or part thereof, will warrant a fine of GBP40; and then,
  • Each subsequent calendar month or part thereof, will warrant a fine of GBP80.
• Finally, failure to respond to request for information made under s.1C(1) or Schedule 1, paragraph 9 will warrant a fine of GBP10 for every month for each subsequent month following the second month of non-compliance.