Bates Wells Briefing for Charities & Social Enterprises | 16 March 2017

Bates Wells Highlights

Charities, Social Enterprise

HMRC has updated its “fit and proper person” declaration and guidance. See today’s Briefing for links to the new versions.

At a glance

The Charity Commission has begun a consultation on how it should approach registering organisations that promote complementary and alternative medicines.

The Office of Tax Simplification has published an interim report on its review of the UK’s VAT system, and opened a call for evidence on how to create a sustainable VAT system for the future.

A4ID has published a summary of EU registration options for NGOs considering how to respond to Brexit.

The King’s Fund has published this response to the Spring Budget.

Charity Commission

The Commission has published a consultation paper on “The use and promotion of complementary and alternative medicine: making decisions about charitable status”. The consultation is about the Commission’s approach to deciding whether an organisation which uses or promotes complementary and alternative medicine (CAM) therapies is a charity. The Commission is seeking views on:

  • the level and nature of evidence to support CAM
  • conflicting and inconsistent evidence
  • alternative therapies and the risk of harm
  • palliative alternative therapy

The Commission has issued a press release in relation to the consultation, which will be open until 20 May 2017. A review of this area of charity law was promised by the Commission following a letter from The Good Thinking Society to the Commission in September 2016 threatening a judicial review action unless the Commission reviewed the charitable status of homeopathy charities, see here for more information. Rosamund McCarthy, a Partner at BWB, says: “The Commission’s consultation on the registration of complementary and alternative medicine (‘CAM’) charities is worthy of a widespread response. There has been a concerted effort by The Good Thinking Society to challenge the registration of a number of CAMs that currently appear on the charity register. Unless there is a rigorous and detailed response, including from the national healthcare (for example cancer) charities that refer patients to CAMs, we are in danger of going backwards and jeopardising the opportunity for people to benefit from CAMs“.

Interim Manager appointment

The Commission has announced the appointment of an Interim Manager (IM) of The Rav Chesed Trust (803758) to the exclusion of the charity trustees. The Commission opened an inquiry into the charity in July 2015 and the IM has now been tasked with taking over the administration and management of the charity and securing the charity’s property.

Charity Tribunal 

new appeal has been filed by Sir Philip Colfox on behalf of The Chapel in the Garden, Bridport.

Charity law cases

See here for the judgment in a recent case Trustees of the Celestial Church of Christ v Lawson ([2017] EWHC 97).  The case related to interpretation of the constitution of an unincorporated charity.

Tax and VAT

HMRC has updated its model declaration and guidance on the fit and proper persons test for individuals who manage charities, community amateur sports clubs (CASCs) and other organisations entitled to UK charity tax reliefs.  The model form now requires charity managers to make specific, detailed declarations that they have not used, or been involved in the design, or promotion of, tax avoidance schemes, by reference, in particular, to the disclosure and promoters of tax avoidance schemes rules, and the general anti-abuse rule. Organisations will want to ask new trustees and managers to sign this updated declaration. However, it is not clear at this stage whether existing trustees and managers who signed the previous version should now be asked to sign the updated version. We will report back anything we hear on this.

The Office of Tax Simplification has published an interim report on its review of the UK’s VAT system, in which it presents the areas of complexity identified during the first phase of the review. It has also opened a call for evidence to help develop its ideas on how to create a sustainable VAT system for the future that imposes minimal burdens on business. In particular, it is looking for:

  • evidence of how these areas cause difficulties and complexities (quantified if possible)
  • ideas for how to improve matters
  • any areas for simplification that have been missed

The deadline for submissions is 30 June 2017.  See here for how to respond. 


Brexit and the budget

The New Statesman analyses the likely effects of Brexit on the economy and the indirect mentions of Brexit in the budget.

EU developments

The House of Lords EU Financial Affairs Sub-Committee published a report on Brexit and EU budget. The report claims that the UK will not be legally obliged to pay into the EU budget after Brexit, however agreeing financial contributions will be a prominent political factor in withdrawal negotiations. On the other hand, European politicians claim that the UK will need to pay its share of EU financial commitments and make contributions into the EU budget until 2020, as the EU’s seven year budget was negotiated in late 2013 by EU leaders (including Britain). It is also possible that bills may be trickling in until 2023 as payments for EU-funded infrastructure, such as roads and airports, are not settled until two to three years after being promised. The full report can be found here and commentary from The Guardian here.


The House of Common Exiting the European Union Select Committee report states that the Government should now make a unilateral decision to safeguard the rights of EU nationals living in the UK, The MPs are also calling on the Government to seek to ensure that UK nationals already resident in other EU countries – and EU citizens already living here – do not lose their rights to healthcare and pensions after Brexit.

Health care

Health Secretary Jeremy Hunt told the House of Commons Health Committee at a recent oral evidence session for its ‘Brexit and health and social care’ inquiry that he did not expect the UK to remain subject to the jurisdiction of the European Medicines Agency following Brexit. Freshfields examines the implications of this and the possibility of an equivalence regime.

EU Registration options for NGOs and Charities

As a follow up to the recent event to discuss A4ID’s guide on EU registration options for NGOs considering how to respond to Brexit, A4ID have published a summary of the main points discussed. Since the event, A4ID have also published a further resource relating to the impact of Brexit on financing arrangements, and their guide on EU funding criteria will be completed very soon.


Opt out consent for fundraising – still lawful under the GDPR

This is a reminder that the ICO’s guidance on consent under GDPR is open for consultation only for another two weeks (closing on 31st March).  Lawrie Simanowitz, Partner in our Charities team,  has highlighted a section that is causing confusion amongst charities.    On page 23 the draft guidance says “There is no such thing as opt-out consent…..You may not rely on silence, inactivity,  default settings, pre-ticked boxes etc.”     The confusion is caused by the terminology that is used here.   Lawrie has pointed out that Macmillan and other leading charities are intending to adopt a consent-based model of fundraising which offers supporters an opportunity to tick a box to opt out of receiving fundraising materials.    This is approved by both the Fundraising Regulator and the ICO.    He says “it is both lawful and can be perfectly good practice for charities to invite people to fill in a form in which it is clearly explained what fundraising materials they will receive,  where they are then offered an opportunity to opt-out.   This is commonly known as opt-out consent, and will remain lawful under the GDPR”.   We encourage charities to respond to the consultation.


The Fundraising Regulator has published this guest blog from Chris Millward, Chief Executive of the Institute of Legacy Management.

Social finance

Social investment deemed to be “too expensive and too difficult”

Pioneer’s Post reports that criticism of social investment dominated the conversation at a Social Enterprise Question Time session during the NatWest SE100 Leadership event in Edinburgh on 9 March, with key assertions being that social investment was prohibitively expensive, a lack of co-investing and insufficient funding available for social businesses that are already currently financed but looking to scale up further. Further details of the discussion can be found here.

The concept of stewardship in investment

Civil Society Media has published an article (written in partnership with Ruffer, an investment management organisation) about the role of stewardship in investment management decision-making processes, exploring the impact of the UK Stewardship Code in international investing practices and how charities can actively align its core values with the fundamental practices inherent in stewardship by incorporating them in the investment manager selection process.

European Commission speech on FinTech

Olivier Guersent, head of the EU’s Directorate‑General for Financial Stability, Financial Services and Capital Markets Union, has delivered a speech on the changes and challenges facing European FinTech. The speech includes references to European supervision of crowdfunding, and the importance of regulators being able to react quickly to protect investors as the sector grows. The speech can be accessed here.



Last week The Telegraph published this article by Theresa May Why I’m giving education a huge boost.


See under Charity Commission above.

The King’s Fund has published this response to the Spring Budget.

Faith Based Organisations

See under Charity law cases above.

International development

See under Brexit above.


ClientEarth, Friends of the Earth and the RSPB have announced they have applied for permission to commence judicial review proceedings against the Lord Chancellor and the Secretary of State for Justice concerning the introduction of revised costs rules in Aarhus Convention claims under the Civil Procedure Rules (CPR). The Aarhus Convention requires that there is access to environmental justice. The Civil Procedure (Amendment) Rules 2017 (SI 2017/95) have changed the costs rules for Aarhus Convention claims from specific caps to allow the court to vary the caps according to its evaluation of the claimant’s financial resources and during the proceedings.

The Law Commission has announced that the government will not be progressing the Wildlife Bill at present due to uncertainty over the future of environmental policy after the UK exits the EU. The Law Commission drafted the Wildlife Bill to consolidate and reform wildlife legislation.

Data protection

The Information Commissioner’s Office has issued one of its highest fines (£270,000) to a firm behind 22 million nuisance calls.


OSCR is publicising a series of consultation events on the Code of Fundraising Practice hosted by The Independent Fundraising Standards & Adjudication Panel for Scotland, in collaboration with the Institute of Fundraising (IoF), the Scottish Council for Voluntary Organisations (SCVO) and OSCR.

OSCR has reminded Scottish charities of the importance of complying with their annual reporting duties.

Stephen Lloyd Awards 2017

Cycle with us in the Hertfordshire countryside!

On Saturday 27 May, the Stephen Lloyd Awards committee are organising a 30 mile cycling fundraising event to bring our community together and to raise more funds for the awards. 

All are welcome (experienced or not). We are keen to get as many participants as possible, so feel free to bring your friends and/or family who would enjoy cycling.  Organised by one of the award’s supporter and leading charity events organiser, Skyline Events, it promises to be a fun experience!

If you are interested in participating, please register a place by clicking here, or contact Mona Rahman.

Got an innovative idea? Apply to the Stephen Lloyd Awards by 7th April

The 2017 Stephen Lloyd Awards is now open for entries and are encouraging anyone, or any organisation, with an innovative idea seeking to address a problem systemically, to apply. The aim of the awards, in line with Stephen’s own approach, is to help create success by finding and nurturing innovative ideas and projects that can lead to practical, sustainable social change. The awards committee is particularly interested in supporting ideas that address social problems at a systemic level.

Applications should be emailed to [email protected].

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

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

This information is necessarily of a general nature and doesn’t constitute legal advice. This is not a substitute for formal legal advice, given in the context of full information under an engagement with Bates Wells.

All content on this page is correct as of March 16, 2017.