BWB Briefing for Charities and Social Enterprise

At a glance

Sector representatives have given evidence in relation to the draft Protection of Charities Bill.

The Cabinet Office has published a consultation on increasing charity audit thresholds.

The ACEVO Commission on Ethical and Responsible Charity Investments has published its report “Good with money” as a guide for charities on investing in line with their mission.

The Department for Culture and Media has issued the long awaited consultation on society lotteries.

The Fundraising Standards Board has teamed up with the charity regulators to encourage the public to give safely to charities this Christmas by remembering the ‘Safe Xmas’ acronym.

The Scottish Charity Regulator, OSCR, has published its summary report on its review of the charitable status of 52 fee-charging schools.

HMRC has migrated its website to

Charity Commission

The Commission has published a report of its inquiry into RAF Honington & Barnham Kindergarten – which was another “double defaulting” charity.

It has publicised the opening of a statutory inquiry into Yoruba Language and Cultural Heritage registered charity number 1148023. The inquiry was opened on 28 April 2014, after concerns were raised by two online platforms who were concerned about suspicious donations processed through their websites. The main issues are that all of the money donated to the charity between February 2013 and February 2014 was transferred from the charity’s account by way of cheques payable to two of the trustees. The inquiry has only been made public now as the regulator had to make a number of enquiries in relation to the finances of the charity and with other agencies before making contact with the charity.

Also see items under Fundraising below and re public benefit, item under Scotland below.

Draft Protection of Charities Bill

Various sector representatives gave evidence to the Joint Parliamentary Committee last week. See here for videos of the sessions.

Charities and trading

The Cabinet Office website has these new pages on charities and trading. They are subtitled 'how to pay less tax as a charity and when to set up a subsidiary trading company' and cover similar topics to the Charity Commission guidance “CC35 Charities and trading”. It’s not clear however why there is now this separate Cabinet Office summary of the rules.

Tax and VAT

Civil Society Media reports Charity Tax Group’s announcement that changes in VAT rules around direct mail fundraising will not now be introduced until April 2015. BWB has been unable to track down an official HMRC announcement and BWB’s Bill Lewis repeats his earlier comments on this issue that “The VAT treatment very much depends on the contractual arrangements between the charity and the publishing house – so getting that right is key.”

HMRC has migrated its website to .

Accounting and Audit

The Cabinet Office has published a consultation on increasing charity audit thresholds. This consultation stems from Lord Hodgson’s recommendation that the threshold at which charity accounts must be audited should increase from £500,000 to £1 million, and that the assets threshold of £3.26 million (which applies where income is over £250,000) should be removed completely.

  • Government proposes to increase the income threshold to £1 million. There would be a corresponding increase in the income threshold at which group accounts must be prepared (which currently also stands at £500,0000).
  • Government is not in favour of increasing the asset threshold, as the current threshold of £3.26 million ties in with the threshold which applies to the audit of company accounts. Government is seeking views on an increase of the assets threshold to £5 million, but it is clear that this is not the preferred option. Government proposes, in any event, to increase the income component of the asset threshold from £250,000 to £500,000.
  • The consultation also asks whether there are any professional accountancy membership bodies that should be added to the list of those whose qualified members can carry out independent examinations of charity accounts.

The deadline for responses to the consultation is 27 January 2015. The aim is for changes to come into force on 6 April 2015.


The item under Local Authorities below might be of interest for those looking at transparency of senior salaries in the charity and social enterprise sector.

Social investment

The ACEVO Commission on Ethical and Responsible Charity Investments has published its report “Good with money” as a guide for charities on investing in line with their mission. The report proposes that charities should have a ‘Responsibility to Reflect’ on their investments – where they are made and how they are managed. It also proposes that larger foundations should have a ‘Responsibility to Innovate’, to use their large size and capacity for risk to ‘err on the side of innovation’ with their investment policies. The report also contains “a wealth of data and technical advice”, including state of the market data, technical content, polling data and research and practical advice. BWB’s Luke Fletcher comments, “We have long argued that the principle that charities exist for public benefit should have wide-ranging implications for the investment policies of charitable foundations. It will be very interesting to see whether any of the major foundations respond to the report’s recommendations and whether the recommendations find their way into the political party manifestos. Certainly, a formal responsibility to ‘reflect’ would help to generate the right kind of constructive board level discussions.”

Big Society Capital has launched the Business Impact Challenge - an “opportunity for corporates to develop high-impact social purpose investment ideas and receive matching funding of up to £15 million and support from Big Society Capital”.

Social finance

HM Treasury and HMRC have published, for consultation, a document setting out draft clauses for the Finance Bill 2015 and related tax policy updates. The document also includes explanatory notes for the draft clauses. An accompanying overview includes, for each clause, an HMRC Tax Information and Impact Note (TIIN) setting out the government's policy intention. Of relevance to social finance is the proposal re bad debt relief on peer-to-peer (P2P) lending. New legislation will be introduced to allow individuals who make loans through P2P platforms to offset bad debts arising against the interest they may receive from P2P loans when calculating their taxable income. The changes will take effect for loans made from 6 April 2015. The deadline for comments on the draft legislation is 4 February 2015. The final contents of the Bill will be confirmed at the 2015 Budget.


New Philanthropy Capital has published a new report “Theory of change for funders”. The report looks at how theory of change can be used by funders as a strategy and evaluation tool.

Local authorities

Local Government Secretary Eric Pickles is calling on councils to be more open about local authorities “top earners”. Already, councils must publish details about pay matters every year, while senior appointments and severance payments of £100,000 have to go to a full council vote. And Mr Pickles has now instructed his officials to look at how guidance can be amended to achieve even greater transparency on top earners.


Education Secretary Nicky Morgan has announced:

  • a package of measures to “help schools instil character in pupils”, including extra funding for projects run by former armed service personnel which help turn around the lives of disadvantaged children.
  • the creation of a new careers and enterprise company for schools “to transform the provision of careers education and advice for young people and inspire them about the opportunities offered by the world of work”.

Also see item under Scotland below.


Monitor has published its December bulletin for Independent Healthcare Providers.

This letter from Secretary of State for Health Jeremy Hunt to the heads of a number of health bodies, sets out the criteria he will use to assess how they are meeting their legal duties on health inequalities in 2014 to 2015.

The national cancer strategy: 4th annual report can be accessed here.

A new agreement to help drive improvements to patient care has been formalised between the Care Quality Commission and the General Medical Council, the regulator for doctors.

Housing and services to the homeless

The government has announced two new funds to help the homeless

Civil Society Media reports the seven projects awarded a share of the Fair Chance Fund money are expected to be run as social impact bonds.


Grassroots football has received a “£50 million boost”. The announcement was made as the Chancellor, George Osborne, opened the new Manchester City Football Academy.


The Minister of State for Disabled People is urging shops and restaurants to improve their accessibility following evidence from accessibility experts DisabledGo that a fifth of shops excluded wheelchair users, only a tiny proportion of restaurants and shops have hearing loops and three quarters of dining establishments do not cater for those with visual impairments.

Late payment

The government has announced new proposals obliging large and listed companies to publish detailed information about their payment practices and performance. This is with the aim of helping small businesses identify the best paying large companies.

Data protection / information

See item under Scotland below.


Society lotteries – The Department for Culture and Media has issued the long awaited consultation on society lotteries. The call for evidence is to explore “the current balance across society lotteries, The National Lottery and competing gambling products in raising funds for good causes and maintaining player protection.“ The consultation closes on 4th March 2015.

Charity shops/cafes – see item under Equality above.

The Fundraising Standards Board has teamed up with the three charity regulators (the Charity Commission, OSCR and CCNI) to encourage the public to give safely to charities this Christmas by remembering the ‘Safe Xmas’ acronym.

S - search for a charity’s name, registration number and landline on fundraising materials
A - ask to see a collector’s ID badge and don’t be afraid to ask questions
F - find the FRSB tick logo, showing that the charity’s fundraising is regulated
E - ensure the collection device is sealed
X - xtra information about charities can be found at
M - make sure clothing collection bags are clearly branded with a charity’s details
A - always check email and web links are genuine before donating
S - still unsure? Contact your favourite charity direct and donate


The Scottish Charity Regulator, OSCR, has published its summary report on its review of the charitable status of 52 fee-charging schools. This follows the conclusion of the Regulator’s two-year assessment of individual schools. Of the 52 schools assessed in total, 40 met the charity test. OSCR took enforcement action in 10 cases, directing schools to widen access to the public benefit they provide. Two reviews have been suspended due to their particular circumstances. The report includes this conclusion about fee-charging school charities and the public benefit test “A high proportion (10 out of 50) of the high-fee-charging school charities we looked at failed the charity test when we first reviewed them, almost all on the basis that the fees they charged unduly restricted access to the educational benefit they provided. This indicates that the initial perception of the high risk of failure presented by these charities was correct.”

OSCR has published its Annual Review for the financial year 2013-14, setting out its key achievements and performance statistics. Key performance highlights include:

  • Processing 1,220 applications for charity status, 782 consents to proposed changes and 395 applications from charities to reorganise
  • Issuing guidance for charities on the Scottish independence referendum
  • Completing the bulk of reviews on the charity status of fee-charging schools.

Also see item mentioning OSCR under Fundraising above.

Information Commissioner, Christopher Graham spoke last week at a Holyrood event looking back at ten years of freedom of information law in Scotland.

Posted on 17/12/2014 in Legal Updates

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