BWB Highlights

Charities with a trading subsidiary should read carefully the updated guidance published last week by the Charity Commission, HMRC and the ICAEW.

Do you know how to effectively make use of data and IT to help drive decision making in your charity? BWB's Lawrie Simanowitz is speaking at tomorrow's IT & Data Insight Conference, offering practical advice on what steps need to be taken. See below for more information.

At a glance

The Commission has issued a “regulatory alert” about charities’ commercial partnerships and arrangements with their trading subsidiaries.

British Red Cross has signed an undertaking with the Information Commissioner’s Office in relation to fundraising telephone calls.

Ten national charities have written to the Chancellor to ask him to use his Budget on 16 March to support smaller charities and community groups.

Charity Commission

Charities and trading subsidiaries

The Commission has published a new version of CC35 – Trustees, trading and tax. The main change is the insertion of a new section 4.5: “Can trustees expect their charity’s wholly-owned trading subsidiary to always Gift Aid all the profits shown in the profit and loss account to its parent charity?” The answer given is “No - If the accounting profit is higher than the value calculated for distributable profits, only the lower figure can be paid across under Gift Aid.”  The guidance also sets out when Charity Commission permission is needed if a charity plans to write off a loan to a trading subsidiary.

Alert issued on commercial partnerships

The Commission has issued a “regulatory alert” about charities’ commercial partnerships and arrangements with their trading subsidiaries.

Donations paid from a trading subsidiary to a charity

HMRC’s guidance for charities “Annex IV Trading and business activities – basic principles” has also been updated at sections 45 and 47 to make clear that any donation payment made by a subsidiary company to its parent charity which exceeds the subsidiary's profits available for distribution is unlawful under the Companies Act 2006.  

The Institute of Chartered Accountants in England and Wales has published this updated briefing on the subject. 


Third Sector reports former Charity Commission Head of Policy and Effectiveness Rosie Chapman is to take over from Lindsay Driscoll as Chair of the Good Governance Code steering group.


British Red Cross has signed an undertaking committing the charity to best practice around fundraising calls.  The charity has committed that it will only call potential donors if they have specifically opted in to receiving fundraising calls in the previous two years. The undertaking was signed after the ICO contacted British Red Cross as part of its investigation into a report in the Daily Mail that suggested a number of charities were ignoring marketing rules to compete for donations. The ICO found the British Red Cross had complied with the law, but offered advice around further good practice that could be implemented.

See this Civil Society Media article where Stephen Dunmore, Chief Executive of the new Fundraising Regulator defends its decision to pay Board members £300 per day.

Also see item regrading lotteries under Northern Ireland below, and regarding restricted fundraising appeals under Advertising below.

Data protection

See item under Fundraising above.

Prodial Ltd, a lead generation firm responsible for over 46 million automated nuisance calls, has been fined £350,000 by the ICO. It’s the regulator’s largest ever fine.

Last week Baroness Nevilie Rolfe, Minister for Data Protection, spoke at the DMA conference about data protection and nuisance calls, EU data protection reform and the US/UK safe harbour.


Ten national charities have written to the Chancellor to ask him to use his Budget on 16 March to support smaller charities and community groups. The letter outlines in detail six costed proposals.


The “anti-advocacy” clause introduced into UK Government grants will not be introduced in Scotland.  The Scottish Government's Social Justice Secretary, Alex Neil, confirmed on 18 February 2016 that, due to it already having robust controls in place, the Scottish Government will not be adding the "anti-advocacy" clause. 

On 23 February 2016, the House of Commons Library published a briefing paper on the political convention of "purdah" before elections and referendums.

Social finance

Big Society Capital has:

Social enterprise

Social Business Trust has announced it will more than double the number of outstanding social enterprises it works with in just two years as a result of a new programme, SBT Design.  

ESELA (the European Social Enterprise Law Association) has published its first newsletter.


On 11 February 2016, the Department for Education announced on its website that it was in the process of reviewing its statutory guidance about making organisation changes to local authority maintained schools in England.

International development

Bond has published its new strategy for 2016-2021.  

This is an interesting article by Steve Harvey at Save the Children about how changing foreign exchange rates can deplete programme goals.


See this blog encouraging sports fans to apply to list their local sports grounds as community assets.


The Advertising Standards Authority has upheld a complaint about a Knights Templar International website and Facebook advertisement. The  ad featured a particular Christian family which KTI said had been persecuted  and asked for funds to help them.  The ASA upheld complaints that the advertisement was misleading (because the funds raised would be used not just for the family in the advertisement) and because the persecution claims made in the advertisement could not be substantiated. 


Charity Finance Group’s most recent Quarter Four bulletin is now available online. It includes a focus on local government funding, as well as updates on current economic issues and the practical impact of these on the charity sector.


See item under Campaigning above.

Northern Ireland

NICVA has published this update on reform of gambling legislation in Northern Ireland.  New legislation is expected, but not before 2017.

Charity update | Spring 2016

Read the latest edition of our Charity update, including a round-up of the latest legal news, opinion and developments for charities.

Please click here to read the Charity Spring Update

Stephen Lloyd Awards 2016

Got an innovative idea? Apply to the Stephen Lloyd Awards!

The 2016 Stephen Lloyd Awards opened for entries on1st February, and are currently encouraging anyone, or any organisation, with an innovative idea seeking to address a problem systemically, to apply. The aim of the awards, in line with Stephen’s own approach, is to help create success by finding and nurturing innovative ideas and projects that can lead to practical, sustainable social change. The awards committee is particularly interested in supporting ideas that address social problems at a systemic level.

Entries for the awards will close on 25th March 2016. Applications should be emailed

For more information about Stephen Lloyd Awards or specific guidelines for the application process, please visit the website at Stephen Lloyd Awards.

New from Get Legal

BWB Get Legal brings you a range of top-quality, affordable legal documents, available to download and customise to your specifications. Every document has been drafted by our expert solicitors.

Our most popular downloads include:


Disclaimer - The information contained in this update is not intended to be a comprehensive update - it is our selection of the website announcements made in the week up to last Friday which we think will be of interest to charities and social enterprises. The content is necessarily of a general nature - specific advice should always be sought for specific situations.

Christine Rigby photo

Christine Rigby

Senior Consultant

+44(0)20 7551 7712

View full information about Christine Rigby

Posted on 01/03/2016 in Legal Updates

Back to Knowledge