BWB highlights

Social Investments

BWB warmly welcomes last week’s Law Commission recommendations to clarify that charity trustees have power to make social investments. This is something BWB has lobbied hard for.

General Election 2015

BWB has produced a full briefing on the General Election 2015 covering the Lobbying Act, election advertising, reputation and privacy and the pre-election period. Please click here for a link.

At a glance

The Cabinet Office is consulting on draft procurement regulations for public sector contracts.

HMRC has updated its guidance for charities on donations with linked rights of admission to a property.

Lord Young is to lead a review of the Public Services (Social Value Act ) 2010.
New Philanthropy Capital has published a report “Smart Money: Understanding the impact of social investment – What NPC has learned so far”.

The Law Commission's main consultation paper on charity law reform will now be published in February 2015.

Charity Commission

The Commission has published this speech by its Chair William Shawcross to the AGM of Voluntary Action Leeds.

The Commission has opened a statutory inquiry into Hospice Aid UK (registered charity number 1092575). The Commission has been assessing concerns about the charity as part of an operational compliance case since January 2014, in particular the charity’s decision to enter into a contract with a direct marking company and the apparent low level of charitable expenditure at the charity. The inquiry will examine, among other things, whether the charity is being used for private advantage and the charity’s fundraising activities, the proportion of funds applied directly for charitable purposes and the potential impact of this on public trust and confidence in the charity. 

Charity Tribunal

Two new appeals have been lodged – no details given

  • Thrift Urban Housing Ltd & Peter Alman
  • Chiemeka, Odiakah, I.O nubogy, U. Onubogu, Obi, Okocha

Tax and VAT

In a recent VAT case involving The Serpentine Gallery, the First-tier Tribunal has determined that benefits offered to supporters of a charity for fixed payments were subject to VAT.

Charity Law Reform

The Law Commission has said its main consultation paper on charity law reform will now be published in Feb 2015.

Tax and VAT

HMRC has updated its guidance for charities to explain that the terms and conditions attached to a donation that gives a right of admission to property cannot include a right to a full or partial refund of the admission payment.

In a recent case, Capernwray Missionary Fellowship of Torchbearers v HMRC the VAT Tribunal have distinguished an earlier line of cases and found a hall used by a charity to run residential and other courses did not qualify for zero rating on construction costs. See full summary and comment from Bill at the end. 

Public Services (Social Value) Act 2010

Lord Young, the Prime Minister’s Adviser on Enterprise, is to lead a review of the Social Value Act . Currently the Act only applies to contacts for services over a certain threshold. The review will help to decide:

  • If the Act should be extended, for instance, to cover contracts for goods and works as well as services
  • How it might be extended in a way that continues to support small businesses and voluntary, charity and social enterprise (VCSE) organisations to bid for public contracts

The review team aims to report on findings in early 2015.

The Social Economy Alliance has welcomed the announcement, particularly the review of whether to extend the Act’s remit. 

Social investment

The Law Commission has published its recommendations for a new statutory power for charity trustees to make social investments. Social investment is defined as meaning any use of funds from which charity trustees seek both:

(1) to further one or more of their charity’s objects; and
(2) a financial return – which could be income, capital growth, full or partial repayment.

Broadly what the Law Commission has said is that while the current law does generally permit charities to make social investments, they think it would be helpful to put this beyond doubt by introducing a statutory power. Alongside this they recommend the Charity Commission and HMRC issue amended guidance. These recommendations require primary legislation so it is likely to be some time yet before they are implemented.

The SROI Network (Social Return on Investment, soon to be Social Value UK) has launched an online tool to help organisations evaluate their social impact.

New Philanthropy Capital has published a report “Smart Money: Understanding the impact of social investment – What NPC has learned so far”.

Civil Society Media reports Big Society Capital has said the government must change social investment tax relief rules to allow investment through funds, and to permit up to £5m of annual investment per organisation.

The Government has issued this press release welcoming the G8 social investment taskforce report mentioned 2 weeks ago. The press release includes links to an animation/film on YouTube providing an overview of the government’s approach to social investment.

Data protection

The European Commission has published a factsheet "Mythbuster: The Court of Justice of the EU and the 'Right to be Forgotten', in which it tries to counter some of the arguments that have been made against the ECJ's decision. The Commission argues that a "sober reading of the judgment shows that the concerns that have emerged in this debate are exaggerated or simply unfounded".


The Cabinet Office is consulting on draft regulations for public sector contracts. These regulations implement the 2014 EU Public Sector Directive. The Cabinet Office plans to implement the new Directive for all procurements, except clinical services, earlier than the 2 years required by the EU because it will “enable us to take advantage of the new flexibilities as soon as possible”. The consultation closes on 17 October.

BWB's Julian Blake has been closely involved with this transposition process, including in consultation with an NCVO expert group. Julian comments; “The UK transposition team has been saying since soon after the Directive was published that its intention is to render the provisions of the Directive into UK law directly, without taking opportunities provided in the Directive for more particular policy development at member state level and this is the main message in the consultation. The European Commission has made it clear that the provisions of the Directive are intended to emphasise and clarify the facilitative nature of the Public Procurement rules, more than to introduce new rules. This is particularly apparent in some of the new terminology: "life-cycle" costing emphasises the significance of social value; "innovation partnerships" emphasise the potential for cooperation between public authorities and suppliers. There is also a replacement regime for social services, some explicit provision for reservation to social enterprises and a theme of promoting SMEs. Given the position of the UK government, the opportunities for active interpretation is passed on to the UK public authorities. However, in the context of the history of the Public Procurement rules being seen as obstacles and barriers to the creative and innovative delivery of public services by public benefit organisations, the major issue continues to be how potentially facilitative rules will be implemented in practice".

Northern Ireland

The Charity Commission for Northern Ireland is to get a new look website from 1 October.

Posted on 01/10/2014 in Legal Updates

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