The Charities Act 2006 modernized UK charity law. Key changes include:
1. Introducing a statutory "public benefit" requirement for all charities to demonstrate they provide a genuine public benefit.
2. Giving the Charity Commission a new objective to promote awareness and understanding of the public benefit requirement.
3. Requiring charities to include a public benefit statement in annual reports starting in 2008 to confirm trustees have considered public benefit guidance.
4. Allowing the Charity Commission to assess existing charities' compliance with the public benefit requirement through a review process.
Presentación sobre testeo de videojuegos que hice como invitada para el LocJAM Granada 2015: un día entero sobre localización de videojuegos organizado por Granada Gaming con motivo del concurso internacional de LocJAM 2015.
With so much competition and perceived sameness, developing a distinct profile is important in helping firms attract quality professionals and grow their practices especially as the drive towards market consolidation and globalisation continues to develop.
For 13 years Soukias Jones Design has been working for leading US, UK and International firms to develop alternative ways to the bland cliched communications that litter the market. We see things differently. We push the boundaries. We encourage clients to do so. The attached presentation showcases our approach in creating brand building campaigns for several UK and US firms. Whether firms are targeting clients, prospects, laterals, graduates or staff, we use creativity to create clear and distinctive communications.
Charity Navigator's Presentation in MoscowCharityNav
Presentation slides from Ken Berger's talk about the importance of trust, accountability and transparency in the nonprofit sector. Mr. Berger is the president and CEO of Charity Navigator and this talk was given at the Agency for Social Information International Conference in Moscow in February 2009.
GT - Where is the Smart Money going in Support Services 2012Grant Thornton
As a follow up to our 2010 report, Grant Thornton commissioned mergermarket to undertake a survey of 40 PE houses active in the support services sector for their views on expectations for the sector over the next 12 months and key issues affecting the market in 2012, including financing market conditions, exit trends and portfolio company management strategies.
Presentación sobre testeo de videojuegos que hice como invitada para el LocJAM Granada 2015: un día entero sobre localización de videojuegos organizado por Granada Gaming con motivo del concurso internacional de LocJAM 2015.
With so much competition and perceived sameness, developing a distinct profile is important in helping firms attract quality professionals and grow their practices especially as the drive towards market consolidation and globalisation continues to develop.
For 13 years Soukias Jones Design has been working for leading US, UK and International firms to develop alternative ways to the bland cliched communications that litter the market. We see things differently. We push the boundaries. We encourage clients to do so. The attached presentation showcases our approach in creating brand building campaigns for several UK and US firms. Whether firms are targeting clients, prospects, laterals, graduates or staff, we use creativity to create clear and distinctive communications.
Charity Navigator's Presentation in MoscowCharityNav
Presentation slides from Ken Berger's talk about the importance of trust, accountability and transparency in the nonprofit sector. Mr. Berger is the president and CEO of Charity Navigator and this talk was given at the Agency for Social Information International Conference in Moscow in February 2009.
GT - Where is the Smart Money going in Support Services 2012Grant Thornton
As a follow up to our 2010 report, Grant Thornton commissioned mergermarket to undertake a survey of 40 PE houses active in the support services sector for their views on expectations for the sector over the next 12 months and key issues affecting the market in 2012, including financing market conditions, exit trends and portfolio company management strategies.
Francis Clark is delighted to present our 9th annual Finance in Cornwall event, which has become an integral part of ‘Cornwall Business Week’.
The event looks to bring together people representing the funding and support streams potentially available to SMEs. Therefore, the event is of great relevance to Business Owners and Managers looking to find the best finance options available for their business and the support on offer to help them achieve their aims.
This year's event includes presentations from the big banks as well as the "alternative" finance providers. There will also be a number of organisations contracted to provide business support; including the providers of the Growth Hub and an update on 'European Funding'.
These are the slides that accompanied the Q1 2021 Quarterly Investment Briefing for West of England on 25th March. The event included lightning talks from Richard Cobb Michelmores MAINstream, Oliver Woolley CEO Envestors and Gaurav Singh JPIN Venture Catalysts.
Slides 68-70 include information about those 17 companies that are actively raising investment in Q1 2021. Check out the disclaimer - these aren't recommendations, just information.
Company Valuation webinar series - Tuesday, 12 September 2023FelixPerez547899
Our first webinar in our series 'Company Valuation webinar: The data and stories emerging from the last 3 months of UK valuations'. is now available on demand.
Understanding the quarterly trends of valuation multiples across the market is vital when making any strategic decision for the long-term future of your business, whether planning a future sale, M&A, identifying growth opportunities to maximise valuation or even for tax reporting purposes.
With substantial experience valuing SME businesses in a variety of sectors, the Strategic Corporate Finance team at Price Bailey ran the first webinar in a series of in-depth quarterly valuation webinars using the very latest market data, in partnership with MarkToMarket, to analyse UK M&A transaction multiples, evaluating interesting trends across various sectors and reviewing the sentiment towards valuation multiples.
During the webinar, the team shared both the data and the stories around what has driven valuations higher and lower using their experience in both expert valuation and M&A negotiation work.
If you weren't able to but are interested in viewing the slides from the webinar, you can do so here.
These are the slides that accompanied the Q2 2022 Quarterly Investment Briefing for the South West on 23rd June. The event included a discussion of the equity investment fund history in the South West and a panel discussion with British Business Bank, QantX, and Newable. Briony Phillips, Rocketmakers also shared an update on the region and information about 12 companies that are currently raising investment - you can find them on slides 16-18.
These are the slides that accompanied the Q4 2020 Quarterly Investment Briefing for West of England on 3rd December. The event included lightning talks from Rod Beer at UK Business Angels Association, Henry Whorwood from Beauhurst, Jerry Barnes from BPEC and Jake Ronay from Newable.
Slides 44-45 include information about those 13 companies that are actively raising investment in Q4 2020. Check out the disclaimer - these aren't recommendations, just information.
Francis Clark is delighted to present our 9th annual Finance in Cornwall event, which has become an integral part of ‘Cornwall Business Week’.
The event looks to bring together people representing the funding and support streams potentially available to SMEs. Therefore, the event is of great relevance to Business Owners and Managers looking to find the best finance options available for their business and the support on offer to help them achieve their aims.
This year's event includes presentations from the big banks as well as the "alternative" finance providers. There will also be a number of organisations contracted to provide business support; including the providers of the Growth Hub and an update on 'European Funding'.
These are the slides that accompanied the Q1 2021 Quarterly Investment Briefing for West of England on 25th March. The event included lightning talks from Richard Cobb Michelmores MAINstream, Oliver Woolley CEO Envestors and Gaurav Singh JPIN Venture Catalysts.
Slides 68-70 include information about those 17 companies that are actively raising investment in Q1 2021. Check out the disclaimer - these aren't recommendations, just information.
Company Valuation webinar series - Tuesday, 12 September 2023FelixPerez547899
Our first webinar in our series 'Company Valuation webinar: The data and stories emerging from the last 3 months of UK valuations'. is now available on demand.
Understanding the quarterly trends of valuation multiples across the market is vital when making any strategic decision for the long-term future of your business, whether planning a future sale, M&A, identifying growth opportunities to maximise valuation or even for tax reporting purposes.
With substantial experience valuing SME businesses in a variety of sectors, the Strategic Corporate Finance team at Price Bailey ran the first webinar in a series of in-depth quarterly valuation webinars using the very latest market data, in partnership with MarkToMarket, to analyse UK M&A transaction multiples, evaluating interesting trends across various sectors and reviewing the sentiment towards valuation multiples.
During the webinar, the team shared both the data and the stories around what has driven valuations higher and lower using their experience in both expert valuation and M&A negotiation work.
If you weren't able to but are interested in viewing the slides from the webinar, you can do so here.
These are the slides that accompanied the Q2 2022 Quarterly Investment Briefing for the South West on 23rd June. The event included a discussion of the equity investment fund history in the South West and a panel discussion with British Business Bank, QantX, and Newable. Briony Phillips, Rocketmakers also shared an update on the region and information about 12 companies that are currently raising investment - you can find them on slides 16-18.
These are the slides that accompanied the Q4 2020 Quarterly Investment Briefing for West of England on 3rd December. The event included lightning talks from Rod Beer at UK Business Angels Association, Henry Whorwood from Beauhurst, Jerry Barnes from BPEC and Jake Ronay from Newable.
Slides 44-45 include information about those 13 companies that are actively raising investment in Q4 2020. Check out the disclaimer - these aren't recommendations, just information.
Investing Climate for Overseas Companies in the UK
Forrester Boyd Practical Charity Handbook 2010
1. England & Wales Charities
A Practical Handbook 2010
independent quality assured professionals
2.
3. Contents and Useful Contacts charities
Contents and Useful Contacts 1
Introduction to UK200Charities Group 2
Members of UK200Charities Group 3–4
The Charities Act 2006 5 – 15
Charity Accounting and Financial Reporting for financial periods ending on or after 1 April 2009 16 – 19
Charity Governance 20 – 22
Charity Tax 23 – 26
Charities and Risk Management 27 – 30
Cross Border Charities 31 – 33
Instructing Investment Managers 34 – 35
Fundraising for Charities 36 – 38
Useful Contacts
The following organisations are useful points of contact for readers wishing to obtain information or
clarification on issues covered in this report, either at the date of publication or in the future.
UK200Charities Group Charity Commission
3 Wesley Hall PO Box 1227
Queens Road Liverpool
Aldershot L69 3UG
Hants GU11 3NP 0845 3000218
Tel: 01252 401050 mini com 0845 3000219
admin@uk200group.co.uk enquiries@charitycommission.gov.uk
www.uk200group.co.uk www.charitycommission.gov.uk
Office of Scottish Charity Regulator (OSCR) HM Revenue & Customs
2nd Floor, Quadrant House St Johns House
9 Riverside Drive Merton Road
Dundee Bootle
Scotland Merseyside
DD1 4NY L69 9BB
Tel: 01382 220446 Charities helpline number 08453 020203
Fax: 01382 220314 www.hmrc.gov.uk/charities
info@oscr.org.uk
www.oscr.org.uk Office of the Third Sector
2nd Floor
Institute of Fundraising Admiralty Arch
Park Place South Side
12 Lawn Lane The Mall
London London SW1A 2WH
SW8 1UD Tel: 020 7276 1234
Tel: 020 7840 1000 www.cabinetoffice.gov.uk/the_third_sector.aspx
www.institute-of-fundraising.org.uk
1
4. charities Introduction to UK200Charities Group
The aim of this report is to set out the broad framework of Charities Legislation in England and Wales and provide an overview of
key governance, investment and fundraising requirements.
UK200Charities Group of quality assured accountants, business advisors and lawyers, wants to help Trustees’ and managers
discharge their responsibilities properly and for charities to understand the complexities of the English and Welsh legislation. We
work closely with the Charity Commission and the Office of the Scottish Charity Regulator (OSCR) on the application of the
Statement of Recommended Practice for Accounting and Reporting for Charities (the 2005 SORP) working through to the annual
report and accounts.
Services Provided by UK200Charities Group members
UK200Group is a global association of over 110 UK quality assured independant Accountant firms and Lawyer firms and 54
International Associate firms. Our Charities Group of specialist proactive accountants and lawyers possess expert knowledge
of the charity sector and help Trustees and management comply with the changing charity regulations. UK200Charities Group
provides training and professional networking for members. Charities Group products include client newsletters and a
comprehensive charity risk matrix.
Business planning services Legal services Sourcing finance
● Business planning ● Obtaining charitable status and ● Budgets and cash flow projections
● Strategic reviews incorporation ● Grant applications
● Systems reviews ● Restructuring ● Lottery applications
● Director & Trustee duties and ● Raising finance
Compliance services responsibilities
● Audit ● Commercial agreements concerning Support services
● Accountancy charities ● Corporate governance issues
● Independent examination ● Financial control reviews
● Internal audit Sector specialisms ● IT support
● Registration ● Agriculture ● Management accounting
● Arts and leisure ● Payroll services
Cross-border Charities ● Ecclesiastical ● Recruitment of personnel
● Advisory services ● Education
● Dual registration ● Grant making Taxation advice
● Healthcare ● Gift aid
● Housing associations ● Payroll giving
● Social welfare ● Property transactions
● Sporting hobbies ● Tax planning for development
● The implications of trading
● VAT planning
This UK200Charities Group report is not intended as a definitive guide to all of the issues arising from Charity Laws as some issues,
such as the public benefit test and its application in practice, merit separate detailed consideration in their own right.
John Watkins
Chairman – UK200Charities Group
Partner at Dickson Middleton, Chartered Accountants
Version 2 – April 2010
This handbook has been prepared for general interest and it is important to obtain professional advice on specific issues. We believe the information contained in it to be correct. While all
possible care is taken in the preparation of this handbook, no responsibility for loss occasioned by any person acting or refraining from acting as a result of the material contained herein can be
accepted by the UK200Group, or its member firms or the authors.
UK200Group is an association of separate and independently owned and managed accountancy and lawyer firms. UK200Group does not provide client services and it does not accept
responsibility or liability for the acts or omissions of its members. Likewise, the members of UK200Group are separate and independent legal entities, and as such each has no responsibility or
liability for the acts or omissions of other members.
2
5. Members of UK200Charities Group charities
England COLCHESTER LONDON NE
Griffin Chapman Haslers
BIRMINGHAM Neil Raven 01206 771000 Laurence Jacobs 020 8418 3333
Dains LLP neil@griffin-chapman.co.uk laurence.jacobs@haslers.com
Andy Morris 0845 555 8844 www.griffin-chapman.co.uk www.haslers.com
amorris@dains.com
www.dains.com HAMPSHIRE LONDON W1
SOUTHAMPTON Griffin Stone, Moscrop & Co
CHESHIRE Fiander Tovell LLP Richard Hill 020 7935 3793
NORTHWICH Mary Wallbank 023 8033 2733 rhill@gsmaccountants.co.uk
Howard Worth marywallbank@fiandertovell.co.uk www.gsmaccountants.co.uk
Julie Whalley 01606 369000 www.fiandertovell.co.uk
juliewhalley@howardworth.co.uk NE LINCOLNSHIRE
www.howardworth.co.uk HERTFORDSHIRE GRIMSBY
BISHOP'S STORTFORD Forrester Boyd
CLEVELAND Price Bailey LLP Kevin Hopper 01472 350601
MIDDLESBROUGH Catherine Willshire 01279 755888 k.hopper@forrester-boyd.co.uk
Anderson Barrowcliff LLP catherine.willshire@pricebailey.co.uk www.forrester-boyd.co.uk
David Robertson 01642 660 300 www.pricebailey.co.uk
davidr@anderson-barrowcliff.co.uk NORFOLK
www.anderson-barrowcliff.co.uk WATFORD NORWICH
Hillier Hopkins LLP Price Bailey LLP
STOCKTON ON TEES John Barker 01923 232 938 Daren Moore 01603 709330
Baines Jewitt john.barker@hhllp.co.uk daren.moore@pricebailey.co.uk
Michael Firman 01642 632032 www.hillierhopkins.co.uk www.pricebailey.co.uk
mf@bainesjewitt.co.uk
www.bainesjewitt.co.uk KENT NORTH YORKSHIRE
CANTERBURY SCARBOROUGH
EAST SUSSEX Larkings Coulsons
LEWES Stephen Wren 01227 464991 Paul Hodgson 01723 364141
Knill James swren@larkings.co.uk phodgson@coulsons.co.uk
Susan Foster 01273 480480 www.larkings.co.uk www.coulsons.co.uk
sue@knilljames.co.uk
www.knilljames.co.uk LANCASHIRE YORK
BOLTON Barron & Barron
EAST YORKSHIRE Bentleys Guy Ward 01904 628551
HULL John Shaw 01204 388675 guysward@barronyork.co.uk
Smailes Goldie john.shaw@bentleys-accountants.co.uk www.barronandbarron.co.uk
Mark Sharpley 01482 326916 www.bentleys-accountants.co.uk
marksharpley@smailesgoldie.co.uk OXFORDSHIRE
www.smailesgoldie.co.uk LONDON BANBURY
LONDON N3 Ellacotts LLP
ESSEX Berg Kaprow Lewis LLP Andy Jones 01295 250401
CHELMSFORD Brian Wolkind 020 8922 9222 ajones@ellacotts.co.uk
Edmund Carr LLP brian.wolkind@bkl.co.uk www.ellacotts.co.uk
Eric Williams 01245 261818 www.bkl.co.uk
Ewilliams@EdmundCarr.com
www.edmundcarr.com
3
6. charities Members of UK200Charities Group
OXFORDSHIRE WEST MIDLANDS NEATH
WITNEY EDGBASTON Watkins Bradfield & Co
ReesRussell LLP J W Hinks Philip Hunkin 01639 635555
Theresa Rees 01993 702418 Robin Barnes 0121 456 0190 philiphunkin@watkinsbradfield.co.uk
trees@reesrussell.co.uk robin.barnes@jwhinks.co.uk www.watkinsbradfield.co.uk
www.reesrussell.co.uk www.jwhinks.co.uk
SWANSEA
SHROPSHIRE WEST YORKSHIRE H.W. Vaughan & Co
SHREWSBURY LEEDS Rylan Lopez 01792 652108
Whittingham Riddell LLP Thomas Coombs rylan@hwv.co.uk
Andrew Malpass Committee Member Christopher Darwin 0113 244 9512 www.hwv.co.uk
Graham Murphy 01743 273 273 christopher.darwin@thomascoombs.com
amalpass@whittinghamriddell.co.uk www.thomascoombs.com
gm@whittinghamriddell.co.uk Scotland
www.whittinghamriddell.co.uk WILTSHIRE
SALISBURY GLASGOW
SURREY Fawcetts Wylie & Bisset
GODALMING Simon Ellingham 01722 420920 Jenny Simpson Committee Member
Roffe Swayne simone@fawcetts.co.uk 0141 566 7000
John Fisher 01483 416232 www.fawcetts.co.uk jenny.simpson@wyliebisset.com
jfisher@roffeswayne.com www.wyliebisset.com
www.roffeswayne.com
Wales STIRLING
GUILDFORD Dickson Middleton
Barlow Robbins LLP - Solicitors BRIDGEND John Watkins Chairman
Christine Goodyear 01483 562901 Graham Paul Ltd 01786 474718
christinegoodyear@barlowrobbins.com Mark Loughran 01656 679800 john.watkins@dicksonmiddleton.co.uk
www.barlowrobbins.com m.loughran@grahampaul.com www.dicksonmiddleton.co.uk
www.grahampaul.com
TYNE AND WEAR
NEWCASTLE UPON TYNE CARDIFF
Robson Laidler LLP Graham Paul Ltd
Michael Moran 0191 281 8191 Brian Scott 029 2068 1980
mmoran@robson-laidler.co.uk b.scott@grahampaul.com
www.robson-laidler.co.uk www.grahampaul.com
WARWICKSHIRE CARDIFF
LEAMINGTON SPA Watts Gregory LLP
Wright Hassall LLP - Solicitors David Williams 029 2054 6600
Mark Lewis Committee Member d.williams@watts-gregory.co.uk
01926 886688 www.watts-gregory.co.uk
mark.lewis@wrighthassall.co.uk
www.wrighthassall.co.uk
4
7. The Charities Act 2006 charities
In July 2001 the Prime Minister that all charities must provide a public not be unreasonably restricted and
commissioned his Strategy Unit to benefit and must satisfy the public people in poverty should not be
review the law and regulation of the not benefit test. However, the legislation excluded; and
for profit sector and this led to a report contains no statutory definition of public
in September 2002 entitled “Private benefit and charities are left to rely on ● any private benefits must be
Action, Public Benefit”. case law. One change that has been incidental.
made is to remove the presumption of
Following a consultation exercise the public benefit for certain types of The above principles are relevant to all
government published its response in charity, ie those that relieve poverty, charities but fee-charging charities need
July 2003 entitled “Charities and Not- advance education and advance to be particularly mindful of
for-Profits: A Modern Legal Framework”. religion. Charities that fall under these unreasonable restrictions and the fact
This led to a draft bill which, following headings will have to demonstrate that that people in poverty should not be
scrutiny, was introduced to Parliament they do provide a genuine public excluded from benefit.
and finally received royal assent on the benefit.
8 November 2006. The Charity Commission will be
Whilst there is no statutory guidance on assessing public benefit by various
The Act has the following objectives:- the public benefit ‘test’, the Charity means:
Commission has been given a new
1. To ensure that trustees of charities, regulatory objective - known as the ● upon registration of a new charity;
especially smaller charities, have more public benefit objective - which involves
flexibility and are able to administer promoting awareness and ● through the inclusion of a public
themselves more efficiently; understanding of the operation of the benefit section in the annual trustee
public benefit requirement. To this end report. This is mandatory for
2. To modernise the definition of the Commission issued general financial periods starting on or after
charity, to update and expand the list of guidance on public benefit in January 1 April 2008. The wording must include
charitable purposes, and to introduce 2008. This was followed by a whole a statement that the charity trustees
new public benefit requirements; series of consultations and subsequent have had due regard to the public
guidance for particular types of charities, benefit guidance published by the
3. To uphold public confidence in the including those charities advancing Commission. The Commission website
charitable sector and to improve the education and religion, and charities contains sample trustee reports for
regulation of charity fundraising; relieving poverty. Most controversially different types of charity; and
there has been guidance for fee
4. To modernise the Charity charging charities such as independent ● through a rolling review of public
Commission’s functions and powers as a schools and private care homes and benefit assessments for selected
regulator and to increase its hospitals. registered charities – the first 10
accountability; and cases included independent schools,
In its guidance, the Commission care homes and religious charities.
5. To introduce a new legal form identifies certain key principles when
designed specifically for charities. considering public benefit: Those existing charities that ‘fail’ the
public benefit test are being given 3
Many of the provisions of the Act are ● there must be a clear benefit or months to confirm that they will comply
now in force but there are important benefits and this must relate to the with the public benefit requirement,
areas which are not – in particular those objects of the charity; with a further 9 months to produce a
relating to charitable incorporated plan of action for agreement with the
organisations and the new licensing ● the benefits must outweigh any Charity Commission. There is no
regime. detriment or harm; indication in the initial reports of how
long the charity has to implement the
This publication is by way of an update ● there must be benefit to the public new plan but the Scottish charity
on some of the key provisions. or a sufficient section of the public regulator allows a further 2 years. If the
and the beneficiaries must be charity does not comply within this
Public Benefit appropriate to the aims; period, it is assumed that the Charity
Commission will exercise its statutory
The Charities Act 2006 refers to the fact ● the opportunity to benefit should powers and intervene.
5
8. charities The Charities Act 2006
Charitable Incorporated – in the case of trusts and disqualified trustee of a CIO from
Organisations unincorporated associations there acting as a trustee of another CIO
will be no automatic conversion and rules prohibiting a CIO from
A charitable incorporated organisation mechanism. using a name that is the same as, or
(CIO) will be a new corporate structure, confusingly similar to, that of a
registered and regulated by the Charity The disadvantages of CIOs are: recently dissolved CIO. The rules will
Commission, which will specifically closely follow the rules contained in
apply to charities. It will be an ● All CIOs will have to submit their the Company Directors
alternative to incorporation under the accounts and annual returns to the Disqualification Act 1986 and the
Companies Acts and will not require Charity Commission. Insolvency Act 1986; and
regulation under both company law and ● Unincorporated associations and ● The accounting rules for CIOs will
charity law. trusts are simpler to set up. closely follow the rules that apply to
● Third parties, such as funders, will be unincorporated charities.
The main advantages of a CIO will be less familiar with CIOs than
that it will afford the benefit of limited companies. As a result of the feedback received
liability for its trustees and members as during the consultation exercise the draft
well as providing a vehicle which can The results of the consultation regulations and model constitutions that
hold property distinct from such procedure carried out by the Charity will introduce CIOs and govern how
persons. Other advantages are: Commission and the Office of the Third they are to operate are being amended
Sector in relation to Charitable by the Office of the Third Sector and the
● It will create a legal framework Incorporated Organisations (CIO) have Charity Commission. The Office of the
designed for charities. now been published. Third Sector has indicated that the
● It will only need to be registered with introduction may take place in two
the Charities Commission (and not Several points have been clarified by the stages, with the structure initially being
the Companies Registry in addition, consultation exercise, including: available only for new incorporations.
as with charitable companies at This will then be followed by the
present), and therefore only one ● The minimum age for CIO trustees structure being made available to
annual return to the Charity shall be 16; existing limited companies wishing to
Commission will be required. ● The same general duty of care which convert to CIO status.
● There will be simpler reporting and applies under the Charities Act 1993
filing requirements. shall apply to CIO trustees; It is expected that the regulations will be
● There will be two main constitutional ● There shall be an automatic updated and make their way through
forms – one where trustees are the prohibition on trustees of CIO Parliament with the objective that the
only members and one where there participating in decisions where they CIO will become available at the
is a wider membership than just the are likely to derive a personal benefit; beginning of 2011.
trustees. These are designed to be ● There will be special procedural
simple and flexible. There will be requirements in relation to decisions Charity Tribunal
two models and certain clauses may to wind up a CIO and to make
be compulsory and others optional. amendments to the constitution of a The newly introduced Charity Tribunal
CIO and those rights will be the only came into existence on 18 March 2008.
There are a variety of routes which will members’ rights enshrined in the Previously charities had little recourse
be available to form a CIO as follows: CIO regulations; against decisions of the Charity
● There will be no statutory right to Commission, other than the internal
● Setting up as a CIO from scratch. remove a CIO trustee and the appeal process or an application to the
● Converting an existing charitable members will need to rely on High Court. The new Tribunal is
company using the procedure set whatever right is contained in the designed to increase accountability for
out in the legislation and possibly constitution of the CIO in order to the Commission and also to assist in
also industrial and provident do so; building a more comprehensive body of
societies. ● Unincorporated associations will be charity case law. It is intended to
● Transferring the assets and liabilities able to be members of a CIOs, either provide informal, speedy access to
of a trust or unincorporated directly or through a representative; justice. The target is 30 weeks to
association to the newly formed CIO ● There will be rules prohibiting a complete the appeal.
6
9. The Charities Act 2006 charities
To date the Tribunal has formed part of orders relating to land, mortgages and It is possible to seek leave to appeal
the Tribunals Service, an executive extending powers of trustees. These against decisions of the Tribunal itself,
agency of the Ministry of Justice. As part decisions will be treated in the same way which will involve the Court of Appeal.
of the process of reform of the Tribunals as matters for judicial review.
system, the Charity Tribunal transferred Register of Mergers
into the new two-tier system as of 1 The table also gives details of who may
September 2009. There is now a apply to the Tribunal in each case. In Under Section 44 of the Charities Act
General Regulatory Chamber (GRC) most cases this includes the charity 2006 new provisions are inserted in the
which will act as a court of first instance trustees, the charity itself for 1993 Charities Act whereby a charity
and an Upper Tribunal which will deal incorporated charities, or any party who merger may be notified to the Charity
with more complex law and precedent is affected by the decision. It could Commission.
setting cases. There will be a fast-track therefore extend to employees or
referral to the Upper Tribunal in beneficiaries if they are directly affected, There are two types of mergers which
appropriate cases. or to other charities dealing with the may be registered. The first is where a
same issue. The procedure involves the charity transfers all its property to
The President of the Charity Tribunal has appellant submitting an application another charity and ceases to exist and
become the Principal Judge for Charity within 42 days of receipt or publication the second is where two charities create
Appeals, Reviews and References and of the Commission decision in question. a new charity and then transfer all of the
will sit as a Deputy Judge in the Upper The Commission will usually be the assets to the new charity. Once all of the
Tribunal. The other 5 legally qualified other party, although they may decide transfers of property have taken place
members and 7 ordinary lay members of not to attend any hearing. The Tribunal the merger may be registered in the
the Tribunal will become Judges and has significant powers and can register of mergers maintained by the
members of the first-tier GRC, listening determine a case before a full hearing. Commission following a notification to
to charity cases. the Commission with the prescribed
Hearings may take place at Tribunal particulars.
The Charity Tribunal may hear the Offices across England and Wales,
following: although the Upper Tribunal is based in An entry in the register must specify
London. All hearings will be public when the transfer(s) of property took
a) Appeals against decisions of the hearings unless there is good reason for place, if a vesting declaration was
Commission; a private hearing. Decisions may be entered into and such other particulars
b) Applications for review of decisions given orally at the hearing. They will be as the Commission may require.
of the Commission; given in writing, with reasons for the
c) References from the Commission or decision, and will normally be A vesting declaration enables the
Attorney General on points of law. published. automatic transfer of property being
transferred in a merger, subject to
No decisions before 18 March 2008 will There is no cost involved in making the certain exemptions, and transferred land
be considered. The difference between application to the Tribunal. It has must still be registered with the Land
a) and b) above depends upon the therefore been heralded as a cost- Registry.
nature of the decision. A comprehensive effective way of appealing Commission
list of decisions that may be appealed is decisions. However it still involves a Where a gift is made to a charity after
included in the table at Schedule 1C of judicial process and charities may not the date of a merger affecting the
Charities Act 1993, as amended. The feel confident to appeal decisions charity, and that merger is registered in
Tribunal will have the power to quash or without taking professional advice. It is the register of charity mergers, such a
uphold decisions, to vary or substitute possible to seek financial assistance from gift takes effect as if the gift had
them and to remit them to the the Bar Pro Bono Unit. Costs may be originally been made to the transferee
Commission. Decisions outside this awarded in two limited situations: charity save in the case of a gift of
table are not subject to appeal. These permanent endowment property.
include decisions on public benefit and 1) against any party where the However the wording of gifts or legacies
charitable status. Tribunal considers they have acted may be such that the gift may still not
unreasonably in bringing proceedings; or take effect as if it had been originally
Certain decisions are only ‘reviewable’. 2) against the Commission where their made to the transferee. This very much
These include decisions to institute original decision was unreasonable. depends on the precise wording of the
section 8 inquiries and not to grant provisions in the will. For example, if the
7
10. charities The Charities Act 2006
will provides what happens if a charity provisions must constitute a minority ● a charitable company may amend its
ceases to exist this may override the of the trustee body; constitution to remove a prohibition
statutory provisions. ● any trustee who is receiving such on payment as long as there are
remuneration is disqualified from sufficient members who are not
Trustee Remuneration acting or voting in relation to that trustees to vote on and pass the
decision or any matter connected necessary members’ resolution, and
The basic premise relating to charity with the agreement, and will the level of remuneration does not
trustees is that they should not derive a withdraw from any such discussions. exceed that permitted by statute.
personal benefit, whether direct or
indirect, from acting as a trustee Any such payments should be In all other circumstances Commission
(although they may be reimbursed for mentioned in the annual accounts and approval of a Scheme will be required
reasonable expenses). Remuneration of conflicts of interest managed before making any payment. There is a
a trustee for provision of services may be appropriately. Any other form of fast-track procedure when applying to
authorised in the constitution or remuneration would still need to be employ a trustee where the
otherwise must be expressly authorised expressly authorised by the remuneration does not exceed £50,000
by the Charity Commission by way of a Commission, as would remuneration per annum.
Section 26 Order. where there is a prohibition in the
constitution. It is not valid for a trustee Trustee Indemnity Insurance
The Charities Act 2006 introduces a new to retire simply to avoid issues of
statutory power of remuneration. remuneration. The statutory power is Before the introduction of Charities Act
However, charities may not avail available in addition to any ‘professional 2006 charity trustees could only take out
themselves of this power if such charging clause’ in the constitution. trustee indemnity insurance if they were
remuneration is expressly prohibited in legally authorised to do so, given that
their constitution. The remuneration of ‘connected the payment of the premium from
persons’ will also be subject to the above charity funds is considered to be a
The new power allows for the payment procedure. The list of connected trustee benefit. This type of insurance
of a trustee, for provision of services or persons has been updated and now covers the trustee against personal
goods and services. The trustee may still includes the child, parent, grandchild, liability when legal claims are made
not be paid for acting as a trustee. Such grandparent, brother or sister of a against them, either by the charity or by
payment is subject to certain conditions, trustee, as well as the spouse or civil a third party. Provided that they have
as follows: partner of the trustee or any of the authority, they are entitled to be insured
above relatives. Child includes against claims that may arise from their
● there must be a written agreement – stepchildren and illegitimate children legitimate actions as trustees and will be
separate from the minutes - between and spouse includes anyone living with covered against liability as long as they
the charity and the trustee in another as if they were a spouse. have acted honestly and reasonably.
question; Authorisation can come from the
● the agreement must set out the However, it is worth pointing out that governing document, the Charity
exact or maximum amount of payment to a connected person is only Commission or from the Court.
remuneration; relevant if their remuneration will
● the amount must be reasonable in directly or indirectly benefit the trustee. The new statutory power allows trustees
the circumstances; It is possible to mount a defence that to take out trustee indemnity insurance
● the trustees must be satisfied that it there is no financial link between the as long as there is no express prohibition
is in the best interests of the charity to two, in which case the employment of in the constitution. However, it will be
enter into this agreement and must such a person is not restricted. available if the constitution merely
observe the statutory duty of care (this contains a blanket prohibition on
could include taking professional or Where the constitution prohibits the remuneration or where the power is
other appropriate advice); remuneration of trustees, the following conditional on Commission approval. In
● the trustees must demonstrate that actions may be taken: these circumstances it can be assumed
they have given due regard to the that the power is available. The trustees
Commission guidance on this ● where the prohibition is stated to be have to be aware of their statutory duty
subject; subject to Commission consent, such of care and ensure that taking out such
● the total number of trustees consent can now be assumed to insurance is in the best interests of the
receiving payment under these have been obtained; and charity. However, there are no statutory
8
11. The Charities Act 2006 charities
conditions to comply with, as in the case were spent. Having passed the ● To increase public trust and
of trustee remuneration. resolution they may access the capital confidence in charities.
immediately. There is no requirement for
The new provisions reflect those that Charity Commission approval or for ● To promote awareness and
have been included in the Commission public notice. understanding of the operation of
model documents for some time. Any the public benefit requirement.
policy will specifically exclude cover for Larger unincorporated charities –
any liability incurred by a trustee in power to spend capital ● To promote compliance by charity
defending criminal proceedings where trustees with their legal obligations
he has been convicted of fraud, For the purpose of these provisions a in exercising control and
dishonesty or wilful or reckless larger charity is defined as a charity that management of the administration
misconduct, or for the payment of a has annual income above £1,000 and of charities.
criminal fine or statutory penalty, or for where the market value of any
any liability incurred as a result of the endowment fund is above £10,000. ● To promote the effective use of
trustee not considering, or not caring However, this only applies to charity resources.
about, the best interests of the charity. endowments where the property in
It would not usually cover liabilities question has been entirely given by a ● To enhance accountability to donors,
arising from contracts entered into by particular individual or institution, or beneficiaries and the public.
the charity, redundancy payments or two or more individuals or institutions
liabilities under a lease, or for liabilities for a common purpose. Functions
usually covered by public liability It has six general functions:-
insurance, fidelity guarantee, insurance As above, the trustees may resolve by a
or professional indemnity insurance. simple majority that the purposes ● Determining whether institutions are
applicable to the permanent charities or not.
Permanent Endowment endowment could be carried out more
effectively if both capital and income ● Encouraging and facilitating the
The Charities Act 2006 introduces were spent. However, unlike the better administration of charities.
several provisions intended to relax the situation for smaller charities, the
restrictions on permanent endowment trustees must send a copy of the ● Identifying and investigating mis-
funds. Permanent endowment is where resolution and their reasons for passing management or misconduct in the
the fund or asset is permanently the resolution to the Commission before administration of charities and taking
restricted so that only the income arising accessing the capital. The Commission remedial or protective action.
from the asset may be used to further may require further information, may
the charity’s aims and not the capital wish to give public notice and may ● Issuing public collections certificate
itself. However, all of these provisions refuse permission to release the in respect of public charitable
relate only to unincorporated charities and permanent endowment. They will collections.
not to charitable companies or CIOs. ensure that the use of the fund accords
with the original spirit of the gift. There ● Obtaining, evaluating and
Small unincorporated charities – is a deadline of 3 months for response. disseminating information with
power to spend capital regard to the Commission’s
The Charity Commission functions and objectives.
For the purpose of these provisions a
small charity is defined as a charity that The Charity Commission has been re- ● Giving information or advice, or
has annual income below £1,000 or formed as a body corporate called the making proposals, to government
where the market value of any Charity Commission for England and departments.
endowment fund is below £10,000 or Wales by way of a non-ministerial
where the fund is not entirely given. government department; with a Powers
The trustees may now resolve by a significant degree of independence from
simple majority that the purposes ministers and government departments. Power to suspend or remove trustees
applicable to the permanent from membership of charity
endowment could be carried out more Objectives The Commission may make an order
effectively if both capital and income It has five regulatory objectives:- exercising the power of removing or
9
12. charities The Charities Act 2006
suspending membership of a charity any duties of his as a trustee in relation dispensation from the requirement for
from a person who has already been to the charity or otherwise in relation to small unincorporated charities to obtain
suspended or removed from the the charity’s proper administration. In the prior approval of the Charity
position of trustee, charity trustee, acting on that advice a trustee is to be Commission to any change in their
officer, agent or employee of a charity, taken to have acted in accordance with objects. This applies to unincorporated
which prevents such a person seeking the trusts of the charity save in certain charities – trusts, associations and those
re-election or re-appointment to their exceptions. subject to Charity Commission Schemes
former position. – which have an annual gross income
Power to resolve membership disputes below £10,000 and do not have any
Power to give specific directions for The Commission may on the application interests in land.
the protection of the charity of a charity or at any time at its
The Commission can direct the actions discretion within the course of an The trustees of the charity may resolve
of trustees, officers or employees or a inquiry determine who are the members to alter the objects as long as:
charitable corporate body if there is any of a charity.
inquiry under way. This arises if the ● the trustees are satisfied that the
Charity Commission believes that Power to enter premises and seize existing objects no longer provide a
misconduct or mismanagement has documents or information suitable application of charity assets
occurred in the administration of the If an inquiry is under way the Charity and that it is expedient in the
charity or it is concerned about the Commission has the power to enter interests of the charity for the
security or proper application of charity premises if a warrant has been issued. amendment to be made. This
property for the purposes of the charity. This power may be given for certain decision must be minuted;
purposes relating to the inquiry and in ● the objects consist of or include
Power to direct the application of certain conditions. purposes that are as similar in
charity property character to the original purposes as
The Commission has power to make an Updating the Constitutions of is practical in the circumstances;
order directing a person in possession or Companies ● the new objects are exclusively
control of charity property to apply the charitable;
property as it specifies if it is not satisfied There are now three circumstances in ● the resolution is passed by not less
that the property is being applied which a charitable company requires the than two-thirds of trustees voting,
properly for the purposes of the charity. prior written consent of the Charity subject to constitutional
This applies even if an inquiry is not Commission to amend its constitution requirements for voting and
under way, but such an order must be and is ineffective if the consent has not quorums; and
consistent with the purposes or trusts of been obtained: ● the trustees send a copy of the
the charity and must not be unlawful. resolution to the Charity
● Any alteration of the objects clause Commission with a statement of
Relaxation of publicity requirements in the Memorandum; reasons for the change. The
The Commission is given discretion with ● Any alteration of any provision in the Commission may seek further
regard to the requirement in relation to constitution which directs how information or give public notice of
schemes and certain orders for giving property can be applied on a the resolution.
public notice or advising the parish dissolution; and
council, if it is a local charity, either with ● Any alteration of any provision The Commission are required to give
regard to the timing or alternatively where the alteration would authorise their approval to the change, even if the
disapplying the publicity requirements any benefit (whether direct or charity is below the threshold and not
altogether. indirect) to the directors or members registered. The change will not be
or to other people connected with effective in any event before 60 days
them. from receipt of the resolution by the
Commission.
Power to give advice and guidance Updating the Constitutions of This is a decision that may be taken by
The Commission may on the written Unincorporated Charities the trustees and does not have to be
application of any charity trustee give its ratified by the membership, should
opinion or advice in relation to any Amending Objects there be a separate membership.
matter relating to the performance of The Charities Act 2006 provides a
10
13. The Charities Act 2006 charities
Amending powers or procedures gratia payments. If there is no power Whilst the provisions in respect of the
There is a similar power to alter the under the constitution to deal with these agreements have been successful in
powers or procedures of an issues, the charity will need to apply to achieving their aims, the 2006 Act has
unincorporated charity, assuming that the Commission for a Scheme. For made some important changes most
this power is not available in the unincorporated charities with annual notably in respect of the requirements
constitution. However, this applies to all income over £10,000 who want to relating to the solicitation statements
unincorporated charities and is not change their objects and have no power that must be made by professional
subject to any limit on annual income. within their constitution, a Commission fundraisers of commercial participators
Scheme must be obtained. to ensure that the public are sufficiently
This decision may be taken by: informed of the fund raising activity.
Copies of all resolutions and updated With effect from 1 April 2008, the 2006
● a resolution of the majority of constitutions must be sent to the Act requires details of the remuneration
trustees where there is no separate Commission to update the register. of the professional fundraiser/
membership; or commercial participator to be included,
● a resolution of no less than two- Fundraising incorporating the basis of calculation
thirds of members attending a and the amount or an estimate of the
general meeting, subject to the The Charities Act 2006 (“2006 Act”) amount as accurately as possible in the
necessary quorum; or introduced new fundraising circumstances. Statements must also
● a unanimous written resolution of all requirements which effectively extend make it clear what proportion of
members. the provisions as previously set out in donations will actually go to the charity’s
Part 2 of the Charities Act 1992 (“1992 work. In addition, the 2006 Act
Where there is a separate membership, Act”) and the Charitable Institutions introduced, for the first time, the
the decision must be taken by the (Fund-Raising) Regulations 1994, as requirement for a solicitation statement
members. There is no statutory list of amended by The Financial Services and to be provided by charity employees,
considerations. There is no requirement Markets Act 2000 (“1994 Regulations”). officers and trustees who act as
for Charity Commission approval or for a It was felt that certain requirements of collectors, which includes the fact that
60 day waiting period. However, the the 1992 Act were too general and did he is such an officer, employee or trustee
Commission will need to be notified of not encourage transparency in and is receiving money in such capacity
any changes for their records. The fundraising activity. More detailed or for acting as a collector. This
changes become effective upon the date provisions have also been introduced in requirement is also extended to persons
stipulated in the resolution. relation to the Regulation of Public who are not professional fundraisers or
Collections to replace Part 3 of the 1992 commercial participators but who in the
For unincorporated charities that are the Act which was never brought into effect. course of their normal business activity
subject of a Commission Scheme this engage in a promotional activity during
provision removes the need to apply for Control of fundraising which they represent that charitable
a ‘power to vary’ the Scheme itself. contributions are to be applied for
Under the 1992 Act, professional charitable purposes. The requirements
The Commission do state that this fundraisers and commercial participators do not apply to volunteers.
power may be used to alter the name fundraising for the benefit of a charitable
of a charity. However, this is subject institution or institutions must have a Licensing Public Charitable Collections
to checking the register to ensure written agreement in place with the
that the name is not already in use relevant charitable institution(s) which The 2006 Act also introduces a new
and the Commission has the power to identifies the parties involved, the unified system to regulate public
order a name change if considered methods of fundraising to be used, the charitable collections in England and
inappropriate. period of the agreement, details of any Wales. The term public charitable
remuneration to be paid to the collections includes appeals for
However, this statutory power cannot be professional fundraiser of commercial charitable, benevolent or philanthropic
used to change the objects, change the participator and other specified purposes and accordingly non-charities
dissolution clause, grant rights to third information. Commercial participators are also covered by the legislation.
parties to appoint trustees, remove are persons who carry on a business
rights from third parties, remunerate other than a fundraising business who The new system introduces the
trustees or connected persons, deal with take part in a promotional venture to requirement that all promoters of
permanent endowment or make ex raise or apply money for a charity. charitable collections hold a valid Public
11
14. charities The Charities Act 2006
Collection Certificate (“PCC”) to be issued Local short-term collections are exempt a determination that registration is not
by the Charity Commission. Prior to from the requirements to obtain a PCC required at this stage.
issuing a PCC the Charity Commission will or permit, but organisers must inform
be required to make checks to ensure that the local authority that the collection is Excepted charities with an annual
the organisations are “fit and proper” to taking place. income below £100,000 will not need to
carry out such collections. Failure to register until 2012. However there are a
obtain the necessary PCC, and/or permits Guidance on fundraising, incorporating group of churches including The Church
will result in a new criminal offence. the new requirements is provided by of The Nazarene, The Free Church of
PCCs may be granted for up to 5 years both the Charity Commission (“Charities England, Independent Methodists,
and can be suspended or withdrawn by and Fundraising (CC20)” updated April Wesleyan Reformed Union and Churches
the Commission or have further condi- 2008) and the Office of the Third Sector. of Christ, that are required to register
tions added or any existing conditions immediately if their annual income is
varied. Given the extent of the new role, Exempt and Excepted Charities over £5,000. This will be phased, with
the Charity Commission has indicated those over £25,000 being registered
that it needs time to develop the The Charities Act 2006 has changed the first. The £5,000 threshold also applies
appropriate regulations and guidance, way in which excepted and exempt to charitable funds associated with
and will also need additional resources charities are regulated. The aim is to registered places of worship – usually
to set up and administer the system. ensure that eventually all of these legacy funds for the maintenance of a
Accordingly, the Charity Commission charities are registered with the Charity church or chapel.
has indicated that it will be a few years Commission, with the exception of
before they take on the role and the certain exempt charities that will have As far as exempt charities are concerned,
requirements of the Act implemented. “principal regulators”. the majority of these are listed in
Schedule 2 of Charities Act 1993. How
Previous legislation referred to “street” From 31 January 2009 excepted these charities are dealt with will depend
collections. The 2006 Act extends this charities with an annual income over upon whether or not they will be
to collections in “public places” which £100,000 must register. It is estimated governed by a principal regulator in the
includes privately owned land, such as that 4,000-5,000 charities will be future. Certain principal regulators have
supermarkets. In the case of collections affected and that the registration already been identified. These include
in a public place the collection is process will take several months. The the Department for Culture, Media and
conducted in accordance with a permit deadline was October 2009. These Sport for Museums and Galleries, the
issued by the local authority in whose charities are largely connected with Department for the Environment, Food
area it is conducted. There are certain religious denominations, the armed and Rural Affairs for Royal Botanic
specific criteria upon which the local forces and scouts and guides groups. Gardens Kew, and the Higher Education
authority may refuse an application and Armed forces’ charities will be registered and Funding Council for England for all
these relate to the causing of a public on a phased basis over 18 months the Universities in England with the
nuisance. Regard will be had to the commencing October 2008. The exception of Oxford, Cambridge and
existence of other collections in the Commission website contains a Durham. These charities will continue
same locality and which are occurring at comprehensive list, details of who to to be unregistered but nonetheless the
similar times. The permit can be contact and the phased timetable. In Commission has powers that can be
withdrawn by the local authority or have the case of many church organisations, exercised in relation to these charities.
further conditions added to it or existing an approved governing document has These powers have been enhanced by
conditions varied. been agreed with the Commission so Charities Act 2006 and include the
that the on-line fast-track registration power to institute a section 8 inquiry but
Previous legislation also referred to process can be used. In many cases only where this has been requested by
“house to house” collections. This has these approved constitutions contain the principal regulator.
been amended by the new legislation to only the charity name, objects and
“door to door” collections, to make it details of trustee appointments. The Some exempt charities will become
clear that business premises are remainder of the constitution is excepted on 1 June 2010 and subject to
included. A charity with a PCC will be contained in separate rules or schemes. the excepted charities registration
able to conduct door to door collections threshold. These include all Universities
without local authority permission, but it If a charity has received a one-off legacy in Wales, Oxford, Cambridge and
must inform the local authority that a that takes it over the threshold, it is Durham Universities, and all Students’
collection is taking place. possible to apply to the Commission for Unions.
12
15. The Charities Act 2006 charities
Voluntary and Foundation schools Furthermore, if a scheme provides that The Charities Act 2006 extends this
became excepted charities on 1 January property is to be transferred to another power to grant relief to the Charity
2009 but a transitional regime is in force charity the scheme may require that the Commission, although it is still possible
whereby they continue to be treated as property is applied for purposes which to make a court application. The
exempt charities, pending further are as similar as reasonably practicable Commission will be able to make an
consideration of their position. to the original purposes. This is relevant order relieving a trustee wholly or
where the original purposes are still partly from personal liability
All further exempt charities where a useful but in the view of the court or the where he has acted honestly and
principal regulator is not ready to take Commission the property can better be reasonably and ought fairly to be
on the role or where possible used in conjunction with property of excused for the breach. This applies to
consequential changes are being another charity. all charities, whether incorporated or
considered (for eample, to accounting unincorporated, and applies equally to
and reporting provisions) will eventually In addition where a charitable donation holding and custodian trustees. The
be registered. These groups of charities has been made in response to a order for relief may be on such terms as
are Charitable Registered Social solicitation for specific charitable the Commission thinks fit.
Landlords, Further Education purposes which includes the statement
Corporations and Charitable Industrial that in the event of those purposes The advantage of the new provisions is
and Provident Societies (which are not failing the property will be applied as if that there is no court process, so
Registered Social Landlords). Those given for charitable purposes generally, obtaining relief should be faster and
with an annual income over £100,000 and in the event that the donation cheaper. There is also the great benefit
will be the first to be registered. cannot be used as originally intended, that the Commission may be able to
similar principles will apply and the grant relief where the trustee is not
Cy-Près Commission and the court will be able absolutely certain that he is liable. It is
to have regard to the spirit of the gift not necessary to prove that an
The Charity Commission or the court is and the social and economic actual breach has occurred. However,
able to make a scheme to change a circumstances prevailing at the time of this will not necessarily provide a
charity’s purposes if they are no longer the propose alteration of the original blanket protection against any future
relevant because they are out of date or purpose. Thus donated money will be breaches. Along with the power to
not workable. Either the property can able to be used more flexibly, unless the grant Section 29 advice, this allows the
be transferred to another charity or the donor makes a relevant declaration Commission to provide significant
purposes of the charity which holds the requiring the trustees to give him the comfort to trustees.
property can be changed. This is known opportunity to request the return of the
as the Cy-Près doctrine. property in question. The Charities Act 2006 allows the
Commission to grant relief not only to
There are three matters to which regard Also where donors of property for trustees but also to auditors,
must be had: specific charitable purposes cannot be independent examiners or anyone else
identified both the court and the appointed to examine a charity’s
1. The spirit of the original gift; Commission (and not just the court) can accounts, provided that they have
decide if the property should be treated acted honestly, reasonably and ought
2. The desirability of choosing new as belonging to the donors. to be excused for any breach of trust
purposes which are as close as possible or duty.
to the original purposes; and Relief from Liability
Waiver of Disqualification
3. The need to ensure that the charity Historically a charity trustee could apply
has purposes which are suitable and to the Court for relief from personal The Charities Act 1993 includes a list
effective in the light of current social and liability. This could either be under of circumstances in which a trustee
economic circumstances. Section 727 Companies Act 1985 (now may be disqualified. These are when
repealed) for incorporated charities or they have:
Henceforth not only the spirit of the gift Section 61 Trustee Act 1925 for
of the property must be taken into unincorporated charities. It was also ● been convicted of any offence
account but also the social and possible to apply to the High Court for involving dishonesty or deception;
economic circumstances prevailing at equitable relief, assuming that the ● been adjudged bankrupt and have
the time of the proposed alteration of trustee had acted honestly and made a not been discharged;
the purpose. genuine mistake. ● made a composition or arrangement
13
16. charities The Charities Act 2006
with creditors; Charges over Land charities be registered who had a gross
● been removed from the office of annual income exceeding £1,000
charity trustee by the Charity The basic position is that the authority of and/or the use or occupation of land
Commission or the High Court; or the court or the Charity Commission is and/or any permanent endowment, and
● been disqualified from acting as a required if a mortgage is to be granted were not exempt or excepted from
company director. over charity land unless it is being registration.
granted by way of security for the
The Charity Commission has the repayment of loans or grants and the The Charities Act 2006 increased the
discretion to waive this disqualification charity trustees, before executing the financial threshold to £5,000 gross
in respect of the trusteeship of a mortgage, obtain and consider proper income per annum. This came into
particular charity or class of charities, as advice from a prescribed person on the effect on 23 April 2007. There is no
long as it is not prohibited by company following relevant matters: longer a requirement to register simply
law for directors (nor can they grant a by virtue of holding land or permanent
waiver that overrides a provision in the ● Whether the loan or grant is endowment.
constitution that automatically necessary for the trustees to be able
disqualifies the trustee). However, the to pursue the particular course of Excepted charities with gross annual
onus is on the charity trustee to action; income over £100,000 were registered
convince the Commission that a waiver ● Whether the terms of the loan or over a period between 1 January 2009
would be in the best interests of the grant are reasonable having regard and October 2009. Below £100,000
charity. Factors that the Commission to the status of charity as the they are likely to be registered in 2012.
might take into account are the nature prospective recipient; and
and severity of the offence, the length of ● The ability of the charity to repay the Exempt charities over £100,000 will be
sentence and time elapsed, the degree sum proposed to be paid by way of required to register in due course,
of risk to the charity’s assets, particularly the grant or loan. assuming that they have no other
cash and investments, and the view of principal regulator.
the other trustees. In the case of a mortgage to secure the
discharge of any other proposed CIOs will have no registration threshold
The Charities Act 2006 introduces an obligation the relevant matter is as they will need to register to become
additional provision but this is only whether it is reasonable for the charity incorporated.
available in specific circumstances. This trustees to take such action having
is where a trustee has been removed regard to the charity’s purposes.
from office by the Commission or by the Report produced by:
Court for misconduct or Further, the regime is extended to
mismanagement of a charity’s affairs, mortgages in relation to a loan, grant or Mark Lewis MA, Solicitor with Wright
usually under Section 18 Charities Act obligation not only which is under Hassall LLP, Solicitors, Leamington Spa.
1993 as a result of an inquiry. The immediate consideration but also to Mark is a member of the UK200Charities
trustee may now apply after five years include any future loan or grant, or Committee. He heads up the Wright
for the disqualification to be waived. other obligation undertaken, after the Hassall Charities Unit and has experience
The Commission will be obliged to grant mortgage is entered into. Such a future of a wide range of charities and not-for-
the waiver unless any of the following transaction may not be entered into profit organisations.
circumstances apply: unless proper advice in relation to the
matters mentioned above has been Mark has considerable experience of
● the applicant is disqualified as a taken in respect of that transaction. charitable work including the formation
company director; There is no change to the prescribed and incorporation of charities, advice on
● the applicant is an undischarged persons who can give the proper advice. charity law, mergers of charities,
bankrupt; fundraising and sponsorship contracts.
● the applicant has defaulted on a Wright Hassall also deals with intellectual
county court judgement; or Registration Thresholds property and employment law, and
● there are other special circumstances contentious probate and other litigation
that are relevant. The Charities Act 1993 required that all issues.
14
17. The Charities Act 2006 charities
He is often asked to speak to charities on
the Charities Act 2006 as well as to
provide trustee training. Mark was for
many years an editor of Butterworths
Corporate Law Service and in addition was
a contributing editor to the Butterworths
Company Law Guide. He is the Consulting
Editor of the Law Society’s Book on the
Companies Act 2006 and is a member of
the Charity Law Association. He is
Chairman of the UK200Lawyers Group.
Barlow Robbins LLP, a UK200Group
Lawyer Member, based in Surrey with
offices in Guildford, Woking and
Godalming, has developed significant
expertise in providing advice to charities,
particularly independent schools, over the
last 20 or so years. Most of the
preparatory and senior independent
schools in Surrey are amongst the Barlow
Robbins clients with schools in London,
across the south east and in the Midlands
coming to the firm for advice on a wide
range of matters. Other charity clients
include Surrey based charities as well as
national charities.
Partners in the firm serve as trustees
themselves so there is an understanding
that charities of today need to organise
themselves in an efficient and effective
way, mindful of the legal and regulatory
framework in which they exist. Barlow
Robbins is able to bring a great deal of
practical as well as legal advice to their
charity clients.
The work done for charity clients
encompasses a number of different legal
disciplines including formation of charities,
charity law and governance, property,
employment law, fundraising and
sponsorship contracts, mergers of
charities, protection and exploitations of
the charity’s name and logo and disputes
involving charities.
15
18. Charity Accounting and Financial Reporting –
charities for financial periods ending on or after 1 April 2009
Charity accounting and reporting for 6 years, including details of ● Income and Expenditure Account
requirements applicable to England and substantial donors, in accordance (where appropriate);
Wales are primarily dictated by The with HMRC requirements. ● Balance Sheet;
Statement of Recommended Practice: ● Cash Flow Statement (where
Accounting and Reporting by Charities Annual Statutory Accounts and appropriate);
(“SORP 2005”); Charities (Accounts and Trustees’ Annual Report ● Notes to the Accounts;
Reports) Regulations issued in 2008 and ● A Trustees’ Annual Report.
the Charities Act 1993 together with the Requirement to Prepare and File
changes contained in the Charities Act Accounts If the charity trustees, the constitution of
2006. This part of the report the charity or any other enactment
All charities are required to prepare
summarises the main accounting and requires that the accounts be prepared
Annual Accounts and make them
reporting requirements for charities, on an Accruals basis, then the accounts
available to the public on request, along
incorporating the most recent must follow the disclosure requirements
with the Trustees’ Annual Report (where
changes introduced by the Charities of the Accruals basis of preparation.
one is required to be prepared). The
Act 2006 and applies to both
availability to the public of the accounts
company and non-company charities Charity Commission guidance on the
and the Trustees’ Annual Report
for financial years ending on or after 1 preparation of Receipts and Payments
underpins the principles of public
April 2009. Accounts, in the form of its “Receipts
accountability and transparency.
and Payments Accounts Pack (CC16)”, is
Trustees are permitted to make a
It is intended to be of a general nature available on the Commission website.
reasonable charge to comply with any
only and no liability will be accepted by
such requests (e.g. copying, postage).
UK200Group or Whittingham Riddell Accruals Accounts
LLP for any action taken or omitted to be
The filing requirements are as follows:
taken in reliance upon it. All charitable companies and non-
● For the financial year ending on or company charities with a gross income
The areas covered in this section are as after 1 April 2009, all charities with a exceeding £250,000 in the financial year
follows: gross income exceeding £25,000 must prepare annual accounts based
must send a copy of their Annual upon the accruals concept with the
● Accounting Records following key components:
Accounts and Trustees’ Annual
● Annual Statutory Accounts and Report to the Charity Commission
Trustees’ Annual Report ● Statement of Financial Activity
within 10 months of the year end.
● Annual Return (SOFA)
● All charities which are also
● External Scrutiny ● Income and Expenditure Account
companies must also file their Annual
● Summary of Information to be sent (where appropriate);
Accounts together with the
to the Charity Commission ● Balance Sheet;
Directors’ Report (Trustees’ Annual
● Protecting Whistleblowers ● Cash Flow Statement (where
Report) with Companies House
● SORP 2005 appropriate);
within 9 months of the year end.
● Notes to the Accounts;
● A Trustees’ Annual Report.
Basis of preparation of Accounts
Accounting Records
There are two bases on which charity Such accounts for charities are normally
All charities must comply with the accounts may be prepared: the Receipts required, in accountancy terms, to show
following requirements in respect of the and Payments basis and the Accruals basis. a “true and fair view” and are required
preparation and maintenance of to apply the methods and principles of
accounting records: Receipts and Payments Accounts SORP 2005 (unless a more specialist
SORP applies) and the Regulations when
● Prepare and maintain accounting Non-company charities with a gross preparing their accounts.
records. These records (e.g. cash income of £250,000 or less during the
books, invoices, receipts etc) must financial year, may prepare accounts on Charity Commission guidance on the
be retained for at least six years (at the Receipts and Payments basis (i.e. cash preparation of Accruals Accounts, in the
least three years in the case of basis) with the following key components: form of its “Accruals Accounts Pack
charitable companies). (CC17)”, is available on the Commission
● Where Gift Aid payments are ● Statement of Financial Activity website.
received records must be maintained (SOFA);
16