Charities Newsletter – August 2019

Our Charities team here at Blake Morgan publishes bulletins to keep you up-to-date with breaking news and topical issues affecting the sector. We also offer regular charity trustee induction and refresher training sessions.

Charity safeguarding and risk management

The Charity Commission published its much anticipated report on the Inquiry into Oxfam GB on 11 June 2019. This has brought with it a renewed focus on safeguarding and risk management issues in the charity sector as a whole.

Trustees need to ensure that they take appropriate action to protect those at risk and their beneficiaries. They also must protect their charity’s own reputation and ensure that they take actions that support their words in this regard.

Charities and their trustees have the difficult task of navigating the risk management landscape, including the filing requirements for serious incident reports and dealing with relevant regulators including the Charity Commission in connection with safeguarding compliance. Trustees should seek professional advice where it is considered necessary.

For further information, please visit our dedicated risk management page.

Charity Commission: display of trustees’ names

The Charity Commission has moved back the date from which the name of all charity trustees will have to be publically displayed on the charity register, unless the Charity Commission grants a dispensation, to 1 April 2020.

The Commission’s guidance provides advice on how to apply to remove a trustee’s legal name from public display provided the required criteria are met. The guidance can be viewed here. If a dispensation has already been granted to a charity or a trustee, the charity or trustee will not need to apply again as this will remain in place.

Charity Commission: alert on reporting cybercrime

In May this year, the Charity Commission published an alert on reporting cybercrime. Cybercrime, which encompasses many crimes that usually involve attacks on computers or networks or theft of data, is more of a threat to charities than ever before. Depending on the nature of the cybercrime, trustees, staff, volunteers and beneficiaries of charities may be adversely affected by it. What’s more, negative publicity can have a dramatic impact on public trust and confidence in not only the charity affected, but the sector as a whole.

The Charity Commission’s alert gives guidance on how trustees can protect their charity from cybercrime and how and to whom cybercrime should be reported. It reminds trustees that if their charity has been a victim of cybercrime or any other type of fraud, then a serious incident report should be made to the Commission.

New Code of Fundraising Practice

The Fundraising Regulator has published a new Code of Fundraising Practice which will come into effect from October 2019.

The changes, which follow a consultation in autumn 2018, include the addition of rulebooks and legal appendices to the code, the introduction of a new structure to enable easier navigation, a clarification of the differences in the law between the four jurisdictional countries of the UK and the use of “plain English” language. The new Code can be accessed here. 

Tax: HMRC issues letters advising charities they must pay a standard VAT rate on social media adverts

HM Revenue and Customs has written to some charities stating that they must pay a standard VAT rate for social media advertising and not claim VAT relief for it. A letter from an HMRC officer to a client of the accountancy firm Crowe confirms the regulator’s stance. It states that adverts on social media are aimed at a precisely targeted audience and so “it is not being communicated to the general public”. Therefore, “The supply of advertising services will be subject to VAT at the standard rate.” If enforced this could have a significant negative impact on the sector and is a case to be watched.

Higher Education providers: Extension of exempt charity status

On 13 June 2019, The Higher Education and Research Act 2017 (Further Implementation etc.) Regulations 2019 were made. Regulation 43 amends Schedule 3 to the Charities Act 2011, which relates to exempt charities whose principal regulator is the Office for Students (OfS).

The amendments came into force on 1 August 2019 and they have the effect of enabling any charity that is also a higher education provider and is registered with the OfS to become an exempt charity by an Order of the Privy Council. In addition, the Regulations will have the effect of removing the exempt charity status from any charitable higher education provider that ceases to be registered with the OfS.

Upcoming event: Charity Trustee Induction and Refresher Training: Southampton, 21 October 2019

Charities are expected to report on their efforts to ensure that all trustees are appropriately trained and inducted to fulfil their role. At Blake Morgan, we offer a tailored half-day training course, which provides a comprehensive induction for new trustees and a useful refresher for existing trustees, ensuring they are fully aware of their legal duties and ethical responsibilities as trustees. 

This course is designed to assist charity trustees and senior managers of charitable organisations in complying with best practice. It will include an interactive session on governing documents, an introduction to charity regulation and a discussion of trustees’ responsibilities in the employment of staff.

For further details or to book your place at the event please click here.