Our Charity News offers the latest updates on guidance and support for the not-for-profit sector, highlighting new guidance issued by charity regulators. We also explore the effects of recent legislative changes, reporting obligations, tax updates and other key issues,
providing insights into the sector’s most important topics and current guidance.
The newsletter is applicable to the whole of the United Kingdom and makes reference to the three UK charity regulators:
- The Charity Commission for Northern Ireland (CCNI);
- The Office of the Scottish Charity Regulator (OSCR) and;
- The Charity Commission for England and Wales (CCEW).
Hot topics
Whistleblowing disclosures made to the Charity Commission
The Charity Commission has published a report on whistleblowing the disclosures made between 1st April 2023 and 31st March 2024, the report outlines the trends and actions taken based on whistleblower complaints. The Commission received 561 disclosures, marking a significant 72% increase compared to the previous year. This rise is attributed to the increasing financial pressures on the charity sector, among other challenges.
Guidance: https://bit.ly/3YiRGPc
Research and analysis on Trustee confidence
In September 2024, the Charity Commission published the results of its research into trustee
confidence and attitudes towards governance. The results highlight key areas of insight in their role including decision making and conflict management. Trustees are confident in their responsibilities to protect their charity and beneficiaries from harm. The report revealed that 70% of trustees feel very confident in making decisions. They generally understand how to make important decisions, such as assessing costs and considering different perspectives. However, they are less certain about what actions to avoid, such as evading difficult questions or allowing personal opinions to influence decisions.
Guidance: https://bit.ly/4e5bbAq
Review of the Code of Fundraising Practice
In early 2024, the Fundraising Regulator updated the Code of Fundraising Practice based on feedback. A final eight-week stakeholder engagement phase began in September 2024, allowing comments on the new draft code until 1 November 2024. The final version of the code will be published in early 2025, along with an implementation timeline. This is the last step before the Code’s official launch.
Guidance: https://bit.ly/3Yzu61U
Guidance: https://bit.ly/3NEcwU5
The King’s Speech 2024
The King’s Speech for the new Labour government outlined the draft laws the government plans to introduce, reflecting their priorities, particularly those outlined during the general election campaign.
Here’s a summary of the key points relevant to charities and voluntary organisations:
- Devolution: An English devolution bill will transfer more powers to local communities, affecting skills, energy, planning and transport. This will be crucial for local voluntary organisations to foster strong relationships.
- Mental Health Act Reforms: Aimed at giving individuals more choice and reducing racial disparities in mental health detention, which will be of interest to mental health charities.
- Ban on Conversion Therapy: A new bill will completely ban conversion therapies for LGBTQ+ individuals, a significant win for LGBTQ+ and human rights charities.
- Violence Against Women and Girls: A crime and policing bill will address violence against women and girls with measures such as specialist rape courts and increased police powers. Charities supporting women and girls should stay informed.
- Net Zero Goals: A Great British Energy Bill will establish a public company for renewable energy investments and the end of the onshore wind ban will support climate goals.
- Tax Relief for Private Schools: The government plans to remove tax reliefs for private schools, which could impact charitable educational institutions.
- Employment Rights: An employment rights bill will include measures like immediate parental leave and sick pay, potentially increasing staff costs for voluntary organisations. It will also protect equal pay rights for marginalised groups.
- Democratic Change: A House of Lords reform bill will address hereditary peers’ rights and might include measures to strengthen election integrity and participation.
Guidance: https://bit.ly/40i8ZlO
Refreshed guidance on decision making for charity trustees (CC27)
The Charity Commission’s updated guidance on decision-making for trustees (CC27) seeks to improve clarity and accessibility while preserving the core principles that trustees must follow when making decisions. The revised guidance is shorter, written
in plain English, and focuses on practical steps to ensure trustees make sound, lawful decisions that serve the best interests of their charity.
Guidance: https://bit.ly/4dZCUCG
Guidance: https://bit.ly/3YBnpfC
Regulatory Alert – local authorities as charity trustees
David Holdsworth, the new Chief Executive of the Charity Commission, has recently written to local authorities regarding their responsibilities as charity trustees. His letter highlights a concerning rise in cases where local authorities have mishandled or improperly disposed of charitable assets, such as land and buildings. This mismanagement can lead to significant legal and administrative complications.
Guidance: https://bit.ly/4fiTlLn
Guidance: https://bit.ly/48nq9kj
Exploring the world of Artificial Intelligence (AI)
In our last edition, we discussed how there are mixed views of AI in general and in the Charity sector, and also pointed out how charities can seek help and guidance from the Charity Excellence Framework on how to prepare for AI.
In the Summer, the NCVO and Microsoft UK shared findings from their recent AI event, specifically drawing on the shared challenges charities face in respect to AI but also how AI can unlock potential to boost the impact charities can make.
Guidance: https://bit.ly/3Alc0Hu
Misinformation spreading across social media
Charities face a significant challenge when it comes to tackling misinformation on social media. As digital platforms become the primary source of information for many, false narratives can easily distort public perception of charity initiatives and damage the trust these organisations rely on to fund their work. Based on insights from the National Council for Voluntary Organisations (NCVO) and the Charity Commission, here are key strategies that charities can adopt to combat misinformation:
- Proactive Communication
- Engaging with Audiences
- Building Partnerships
- Monitoring Social Media
- Rapid Response Mechanism
- Educational Campaigns
Guidance: https://bit.ly/3YFKNrt
Guidance: https://bit.ly/3ApbGYe
Charity law reform – England and Wales
In previous editions, we have reported on the reforms set out in the Charities Act 2022 that have come into effect. In accordance with the implementation plan for the Charities Act 2022, we have been expecting to see sections 15 and 16: ex gratia payments to come into force.
The key recommendations made in the 2017 Law Commission’s report in respect of ex gratia payments included:
- To allow charity trustees to delegate the decision to apply to the Charity Commission to authorise an ex gratia payment.
- To enable charities to have power to make smaller payments without Charity Commission approval.
Note: The above changes apply equally to statutory charities as they do to other charities.
Guidance: https://bit.ly/3YCyptg
Guidance: https://bit.ly/40kiUHQ
Accessing adequate banking services
In our previous newsletter, we included a summary of an open letter written by Charity regulators to UK banks which aimed to address several banking challenges that charities face. In the summer, the Charity Commission published guidance on information for charity banking and the support available to charities trying to access adequate banking services.
Guidance: https://bit.ly/3YAwN3i
Accounting and tax update
Improving your charity’s annual report and accounts
The Office of the Scottish Charity Regulator (OSCR highlights four key areas where charities can improve their annual reports and accounts, based on a review of 60 randomly selected charities:
- Trustees Annual Report: Charities should ensure the report fully explains their activities and impact, complying with all legal requirements.
- Comparative Information: Providing this information is important for transparency and accuracy.
- Reserves Policy: Charities should explain their approach clearly, ensuring good financial management and governance.
- Governing Documents: Compliance with these rules is essential for proper charity management.
Guidance: https://bit.ly/4e3L6BZ
Autumn Budget 2024
The Autumn 2024 Budget announcement by Chancellor Rachel Reeves introduces a range of impactful measures for UK charities, with a focus on social support, essential services and tighter fiscal regulations. While charities may benefit from specific funding increases, they also face heightened costs and new regulatory changes. Here’s a breakdown of the key announcements relevant to the voluntary sector:
- Employer National Insurance Contributions Increased to 15%
- Changes to VAT and Business Rates Relief for Private Schools
- New Legislation to Prevent Charity Tax Rule Abuses
Other matters relevant to charities
The Budget also introduces several funding increases that may benefit charities working in local communities. Local government funding will rise by 3.2%, with £600 million earmarked for social care, indirectly supporting charities that collaborate with councils to provide essential services for vulnerable groups. An additional £1 billion for SEND services is set to expand educational and healthcare support for young people with complex needs, strengthening resources for charities working in this area. Charities will also benefit from continued energy price support, with an emphasis on energy efficiency measures to help manage rising costs. Lastly, new funding for volunteering initiatives aims to boost community engagement, offering charities new resources to support volunteer-led programmes and strengthen local social networks.
Navigating the opportunities and challenges
The Autumn 2024 Budget offers both opportunities and challenges for the charity sector. The increase in local government funding, SEND support and volunteering initiatives provides valuable resources. However, rising operational costs, such as the National Insurance increase to 15%, VAT changes for private schools and reduced cultural funding present financial pressures. Additionally, new anti-abuse legislation requires charities to ensure rigorous financial compliance.
Guidance: https://bit.ly/3Cctkza
We work with a range of charities, varying in size and nature – from the very small to more complex groups of entities. This means we can provide bespoke advice on how to achieve your goals and navigate the complex web of regulation. If you seek more specialist advice to support your charity, please get in touch.
