What to do with a 'found' dog that's clearly been neglected?

[Bettyhatesavocados]

Friend and I found a dog wandering the road a few miles away from where my friend lives. No collar, a bit timid at first but then super friendly. Took the dog back to my friend's (who has two dogs already...so not ideal but getting on okay).
The dog is gorgeous, a bitch, seems young as she is very playful (playing a lot with friend's younger dog who is almost 11 months old and also a bitch). Also picked up dog rope toy. Jumps up on the sofa and snuggles in. Drank lots of water but refused food. Has peed three times in the house, thankfully not on carpet. Friend has taken her for a walk and said she walks well on the lead.
Little dog ate a bit of dog sausage treat so maybe just fussy. Doesn't appear to be underweight, teeth seem good. The problem is that she is severely matted from half way down her back to the tail, backside and underbelly, and back legs. Oddly, no matting on head, front legs and chest... It's like the front end is one dog and the back end is another dog! There is also a 'greasy' are in the middle of her back which, strangely, smells like she's been sprayed with air freshener or something! No visible fleas but seems itchy...possibly the matted areas bothering her.
My friend probably can't keep her and neither can I :( But, if we take her to a vet and she is chipped we are both more than reluctant to hand her back over to whoever let the poor thing get into this state. I don't think this is something that has happened to her in the course of being lost... The matted parts are just too established.
Friend and I have called a groomer and explained the situation. She has kindly said she will shave her on after the BH. We have asked her if she can bag the matted fur she cuts off so my friend can present it to his vet when he takes her to get checked for a microchip...
Would love some advice on what to do, especially if she is chipped. I can't bear the thought of her going back to a life of neglect :( She is a beautiful little Shih Tzu with a lot of years ahead of her, I'm guessing.
Whether to contact the RSPCA (because of the neglect)...though I know they get a bad rap on here.. Or give her to Dogs' Trust or contact local charities for help?
Can anyone offer any advice? She is adorable and I want the best for her. Friend has agreed to keep her over the BH, get her shaved and take it from there...
Thanks!

Yeah, I guess about five posts in that your “friend” wants to keep the dog 🙄

She’s not yours
Get over yourself and get it to the vet

Many vets won't give details of original owners when you hand in a lost dog - they'll take your info and the owner can make contact if they wish.
We had this when one of our cats got hit by a car; some people in another car saw her in the gutter ,and took her to the emergency vet, who treated her and contacted us. I wanted to send them a thank you card, but had to leave it at the surgery for them to pass on-they wouldn't give me the other people's address.

@TheWholeJingbang

Yeah, I guess about five posts in that your “friend” wants to keep the dog 🙄

She’s not yours
Get over yourself and get it to the vet

If you go to the OP, click 'see all' under OP's posts it might make things easier for you.

I have a little Yorkie, and one day someone knocked on my door with an identical Yorkie, thinking he was mine and had slipped his leash. The man was a delivery driver and not local, someone had told him the dog was probably ours.

He was an adorable little pup and my dog responded well to him (he's a tad irritable with other dogs most of the time, typical little dog syndrome).

My husband suggested putting a collar and lead on the dog and seeing if he led us anywhere, and he took us straight to his house about half a mile away. His owners were frantic because he'd disappeared and they thought he'd been stolen. If that hadn't worked, we would have appealed on local social media and had him scanned for a microchip.

I hope the dog you found is successfully reunited with her owner. The matting may be because the dog groomer has been too busy to fit the dog in, they've only just reopened round here. Not necessarily the sign of neglectful owners.

@TheVolturi

Posted before I was finished, I was going to say that the vets have not got any right to keep the dog, if not chipped then you as the finder should be able to decide if you want to hang onto the dog or not I thought?

The vets have a duty of care towards the dog and will know the right thing to do (legally). This probably means handing the dog over to the local dog warden.

No, I suppose they can't stop you taking the dog back but they could be on dodgy grounds if the owner turned up and found their dog had been allowed to go home with a total stranger.