Charities Newsletter – October 2019
Our Charities team here at Blake Morgan publishes e-bulletins to keep you up-to-date with breaking news and topical issues affecting the sector. As well as our charities newsletter, we offer regular Charity Trustee induction and refresher training sessions.
Charity Commission: International Charity Fraud Awareness Week 2019: 21 to 25 October 2019
This campaign is being led by a coalition of over 40 charities, regulators, law enforcers, representative bodies and other not-for-profit stakeholders and is intended to encourage and empower charities to talk about fraud and share best practice.
Details of the aims and how to get involved, including downloading the supporters pack from the Fraud Advisory Panel and/or to get involved in the webinars and discussions, can be viewed here.
Campaigning: Reminder from Charity Commission and new guidance on campaigning for charities published by the Electoral Commission (change below)
As expectations grow for a general election, the CEO of the Charity Commission, Helen Stephenson, has issued a reminder to charities of their responsibilities surrounding political campaigning. The CEO notes that “the deeper the divisions in the country, the more important it is that charities are demonstrably driven not by their leaders own world views, but by the needs of the beneficiaries they serve.”
The Commission has published guidance on campaigning and political activity for charities, as well as supplementary guidance on campaigning and political activity during election periods which charities should be reminded of. The guidance includes, amongst other matters, that trustees must not allow the charity to be used as a vehicle for the expression of the personal or party political views of any individual trustee or staff member, and trustees must weigh up the possible benefits against the costs and risks in deciding whether the campaign is likely to be an effective way of furthering or supporting the charity’s purposes.
Charity Commission: Advice for Donors
In light of the potential for charity scams, the Charity Commission has issued advice to donors as to how to give safely to charities. They have also issued guidance as to how to report suspicious activity in the event that a donor concludes that a collection or appeal is not legitimate.
Their advice includes checking the charity’s name and registration number, as well as checking whether street collectors are wearing a proper ID badge and that their collection tin is sealed and undamaged. It is advised that where donors feel that a collection is not legitimate, to report this to the Charity Commission and Fundraising Regulator.
Charity Commission: Concerns over quality of external scrutiny of accounts
In a sample of just under 300 charities accounts, the Charity Commission have found that only half of charity accounts studied meet the regulator’s external scrutiny benchmark. The benchmark was introduced to ensure that the basic requirements were met, so the fact that over half were not meeting the bare minimum requirements creates cause for concern.
The regulator is now working closely with The Institute of Chartered Accountants in England and Wales and Association of Chartered Certified Accountants‘ to improve member’s awareness of charity reporting and accounting requirements.
The Commission has made the benchmark available online and expects those scrutinizing charity accounts to make use of it, and for trustees and others interested in charity accounts to be aware of it. The Commission has also updated its ‘Independent examination of charity accounts: guidance for trustees (CC31)’, to make it more accessible to trustees. The guidance is aimed at helping trustees appoint an independent examiner with the right ability and practical experience to carry out a competent examination of the accounts, and allowing them to prepare appropriately.
Memorandum of Understanding between the Information Commissioner and Charity Commission
The government has published a Memorandum of Understanding (MOU), setting out the relationship between the Charity Commission and the Information Commissioner.
It is noted that the MOU establishes a framework for cooperation and information sharing between the Charity Commission and the Information Commissioner, governing the sharing of information and intelligence between the parties. It is hoped that the MOU will enable closer working between the Charity Commission and the Information Commissioner to further assist them in their regulatory functions.
It is noted that both parties will ensure that all information shared is appropriately protected, and except where disclosure is required by law, all information shall be treated as confidential and will be safeguarded accordingly.
The MOU can be found here.
Tax: HMRC updates guidance notes on how the tax system operates
HMRC updated their guidance as to how the tax system operates in August 2019, with revisions to gift aid chapter 3 (sections 3.18 to 3.25) concerning donor benefits. The new guidance aims to clarify when and how donor benefits should be treated and how they are valued for Gift Aid limits.
The key changes include representing the relevant value test as two not three thresholds, applying the disregard to electronic literature as well as physical literature, and a more flexible approach to valuing benefits where there is no commercial value (i.e. a non-ticketed event) noting a fair and reasonable method of valuation will suffice.
Chapter 3 can be found here.
Tax: HMRC issues reminder to charities to register with HMRC so that they can claim Gift Aid on eligible donations
HMRC has issued a reminder to charities that Gift Aid can be claimed on donations made by eligible taxpayers, which will boost donations by an extra 25% if the donor makes a Gift Aid Declaration (GAD). Charities should ask donors to fill in a declaration form when they make a donation if they are eligible. A donor must be a UK taxpayer and have paid at least as much in Income Tax or Capital Gains Tax as the charity wants to claim in Gift Aid.
Furthermore, HMRC also wants to remind charities that with the Gift Aid Small Donations Scheme, charities can also claim 25% on donations of £30 or less without a GAD form. For more information on Gift Aid and the Gift Aid Small Donations Scheme, visit the Claiming Gift Aid as a charity or CASC webpage on GOV.UK.
Read more on claiming Gift Aid as a charity or CASC.
Upcoming events: Charity Trustee Induction and Refresher Training: Southampton, 21 October 2019 and Oxford, 12 November 2019
Charities are expected to report on their efforts to ensure that all trustees are trained and inducted to fulfill their role. We offer a tailored half-day course providing a comprehensive induction for new trustees and a useful refresher for existing trustees and ensuring that they are fully aware of their legal and ethical responsibilities as trustees.
Our next sessions are:
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