BWB Briefing for Charities and Social Enterprise

At a glance

The Charity Commission has announced three additional questions will be added to the Annual Return for 2015.

A draft of the Protection of Charities Bill has been published.

NCVO and ACEVO have published details of their reviews of Charity Commission governance and sector regulation.

The Government is launching the Impact Readiness Fund.

Charity Commission

On 22 October, David Cameron announced an additional £8 million of funding, over three years, to boost the Charity Commission’s ability to tackle abuse, including the use of funds for extremist and terrorist activity. The commission is also being granted an additional £1 million in general funding for 2015-16, also to fund immediate resource needs in investigations, monitoring and enforcement.

The Commission has published details of two recent decisions on registration:​

​The Commission has also published Operational compliance case reports involving the charities:

​A new member has been appointed to the Charity Commission board. Mike Ashley, formerly Head of Quality and Risk Management at KPMG LLP will also chair the Commission’s Audit and Risk Committee.

Changes to the Charity Commission Annual Return for 2015

Following a consultation earlier this year, the Commission has announced it will be including three additional questions in the Annual Return for 2015. They are:

“In the reporting period, how much income did you receive from:

(a) contracts from central or local government to deliver services
(b) grants from central or local government?

Does your charity have a policy on paying its staff?

Has your charity reviewed its financial controls during the reporting period?”

​A possible further question about charity spend on campaigning will not be included in the 2015 Return but may be introduced in 2016. Similarly a proposal to ask charities with incomes of between £10,000 and £500,000 to provide some “key financial information” through the Annual Return will not proceed but the Commission is going to explore whether a technological solution, for example the introduction of accounting software, might allow it to gather this information. See NACVA’s press release welcoming this.

Review of sector regulation

NCVO is to review the Charity Commission’s governance structure and appointments process in order to “find ways for the regulator to put questions about its political neutrality to rest for good”. The review of the Commission’s governance will be conducted by NCVO guided by an advisory panel with relevant expertise and is expected to conclude in summer 2015.

ACEVO has announced its own Commission on better charity regulation, chaired by Lord Low of Dalston. The Low Commission, set up last month, will be assessing whether the Charity Commission is fit-for-purpose, what changes could be made to improve the regulatory framework and remove red tape, and whether the sector as a whole is over regulated. It will examine international comparisons and whether changes in the law are needed to make running a charity less burdensome. It will also consider how and if campaigning should be regulated.

Protection of Charities Bill

A draft of the Protection of Charities Bill has been published. See here for the Government press release and here for the draft Bill. The measures in the draft bill include:

  • banning people with convictions for certain criminal offences – such as terrorism or money laundering – from being a charity trustee
  • a new power to disqualify a person from being a charity trustee where the Charity Commission considers them unfit
  • a new power for the Commission to require a charity to shut down in an inquiry where there has been misconduct or mismanagement and allowing the charity to continue would risk undermining public trust and confidence in charities
  • a new power for the Commission to issue an official warning which it could use in less serious cases. The Commission can put this on the charity’s official record and if evidence is found that they have not dealt with the problem then the Commission will take further action​
  • closing loopholes that have prevented the Charity Commission from taking enforcement action in the past, such as where trustees have in the past resigned in order to avoid removal and consequent disqualification

​The Commission has broadly welcomed the draft bill but has said it is hopeful that some further measures may be included in the draft legislation as it passes through pre-legislative scrutiny.

​A joint committee of the House of Lords and House of Commons will be appointed to consider and report on the draft Protection of Charities Bill by 28 February 2015.

Charity Tribunal

An appeal by Pamela Kennaugh to the First Tier Tribunal (Charity) has been struck out because the Tribunal did not consider the Commission had made a decision within the schedule of appealable decisions. It appears to be a case where the Appellant treated an advisory email from the Commission as a decision.

An application has been made to the First Tier Tribunal (Charity) for a review of a Charity Commission decision. The application has been made by: Kebede, Gobena, Worku, Woldetsadik, Ta desse, Assress, Bekle, Gebremichael and Kebede.

Tax and VAT

Civil Society Media reports a number of sector umbrella bodies agree there is an “overwhelming case” for an early review of the Gift Aid Small Donations Scheme because most of the charities it was aimed at either do not know about it, cannot understand it, or are not eligible for it. BWB’s Bill Lewis comments “I couldn’t agree more. The complexities of this scheme are such as to make it very off-putting. The initial concept of allowing charities to claim gift aid of up to £1250 on cash donations without the need for a supporting gift aid certificate was most welcome, but HMRC fears that bogus charities would be set up to claim this sum has meant that the rules are complex and off-putting. As a consequence many large charities are not bothering with the scheme because the administrative effort does not make it worthwhile. Meanwhile many smaller charities, those that could most benefit from the scheme, do not use it. One of the major problems is that in order to make use of the scheme a charity must already be claiming gift aid, but many smaller charities do not claim gift aid because they find that too complicated and are afraid of the consequences of getting it wrong, and so are automatically unable to use a scheme that was initially intended with them in mind."

Company law - proposed new register of people with "significant control"

The UK Government has committed to implement a publicly accessible central register of the individuals who ultimately own and control UK companies – the company’s beneficial owners or ‘people with significant control’. The Small Business, Enterprise and Employment Bill will implement that commitment by introducing a central register of people with significant control over UK companies (the ‘PSC register’). This Government has published a discussion paper seeking views on the guidance that will be required to help companies and others understand the new requirements. It also seeks views on two key elements needed to implement the register that will be dealt with in secondary legislation. The first is the way a PSC’s control over a company is recorded on the PSC register. The second is the way some PSC data needs to be protected from public disclosure. Responses are requested by 9 December.


NCVO has announced that, following the general election, it will carry out a review of the environment for campaigning. The review is expected to draw on international comparisons and will publish recommendations intended to help secure the environment for charities’ advocacy work.

ACEVO’s Low Commission will also consider how and if campaigning should be regulated – see Review of Sector Regulation above.

Social investment market

These are the winners of the first ever UK Social Investment Awards.

Philanthropy Impact has published four articles on social investment from the view of the investor. They are all included in the latest edition of Philanthropy Impact Magazine.

Impact Measurement

This month the Government is launching the Impact Readiness Fund – aimed at helping social ventures to improve their social impact and be able to demonstrate this to investors and commissioners. Grants between £15,000 and £150,000 will be available until late January 2015. Support providers with a track record of helping social ventures monitor, measure and report on their social impact can apply to become approved providers from now till midday on 10 November 2014. Application packs for grants will be available the week commencing 17 November.

Social enterprise

The first national Community Interest Company (CIC) innovation and productivity survey has been launched by Drs. Helen Haugh and Kate Thirlaway at the Judge Business School, University of Cambridge. The aim of the research is to investigate the determinants of CIC innovation and productivity and analyse their impact on economic, social and environmental growth.


Schools - The government has issued this press release about 35 further free schools being approved. The press release also includes the results of a survey of head teachers of existing free schools.

​Higher Education: A review of the financial health of higher education institutions published by HEFCE concludes that the higher education sector in England faces significant financial challenges over the next three years.


NAVCA has welcomed the NHS five year plan, launched by Simon Stevens, the chief executive of NHS England. NAVCA says "The NHS five year forward view has a welcome recognition of the value of the voluntary sector in delivering community based services that improve health."

New Philanthropy Capital has published a report "Support good health: the role of the charity sector".

Rehabilitation services

The government has announced the successful bidders for contracts to provide rehabilitation services. The list of preferred bidders includes 16 charities and voluntary organisations, four probation staff mutuals and seven private companies. In addition, around 75% of the 300 subcontractors named in the successful bids are voluntary sector or mutual organisations.


See BWB’s Briefing about a recent Supreme Court decision which impacts on the adequacy generally of consultations.


The Fundraising Standards Board (FRSB) has upheld a complaint against Save the Children.

Donations to charity by solicitors from unclaimed monies in client account

The Solicitors Regulation Authority has raised the amount law firms can donate to charity from unclaimed client account balances, from GBP 50 to GBP 500. Under Rule 20.1(k), money may be withdrawn from individual client accounts and paid to a charity if efforts to locate the client have failed; however, the charity must provide an indemnity against a claim being made later if, for example, the client remerges and demands the donated money. The new rules apply from 31 October 2014.

Republic of Ireland

The new Charities Regulatory Authority opened its doors for business on 16th October 2014. English charities operating or “carrying on activities” in the Republic of Ireland will need to register with the CRA. This is expected to be sometime in 2015.

Posted on 06/11/2014 in Legal Updates

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