Bates Wells Briefing for Charities & Social Enterprises | 22 March 2017

Bates Wells Highlights

Charities, Social Enterprise

Last week, in the long-running case of Ilott v Mitson, the Supreme Court overturned the Court of Appeal’s six-figure award in favour of an adult child out of a gift left to charity, and reinstated a much smaller sum. See today’s Briefing for comment from BWB’s Leticia Jennings and Rob Oakley.

At a glance

Registered charities in England and Wales can now apply to register with the Fundraising Regulator.

Two pieces of Charity Commission guidance have been “refreshed” this week: “Charity Finances: Trustee Essentials (CC25)” and Charity governance, finance and resilience: 15 questions trustees should ask”.

The Government has launched its Brexit website, Plan for Britain.

New Philanthropy Capital has published “Impact reporting: What trustees need to know”.

Charity Commission

Operational Guidance on Disqualification of Trustees

The Commission has published operational guidance relating to the new power in section 181A Charities Act to disqualify individuals from being trustees. Previously, only an Explanatory Statement and a Q&A document about the power were published on the Commission’s website.

Updated CC guidance

Two pieces of Commission guidance have been “refreshed” this week:

Paula Sussex speech

The text of Paula Sussex’s speech to the Institute of Chartered Accountants England and Wales’s (ICAEW) annual dinner has been published, in which she announced the changes to CC25 referred to above.

Commission funding consultation

In a letter to the Lords Select Committee on Charities, William Shawcross and Paula Sussex have confirmed that the Treasury has now given the Commission approval to explore its funding options further in a formal consultation (expected to be launched shortly), working alongside the Minister and officials in the Department for Culture, Media and Sport.

New inquiry

The Commission has opened a statutory inquiry into Hindu charity Bhaarat Welfare Trust (1077821) and frozen its bank accounts. The inquiry will look into a number of serious regulatory concerns about the financial management of the charity, including concerns about the ability of the trustees to account for funds transferred to India over a five year period, the basis on which donations for a specific project were held, unmanaged conflicts of interests and whether Gift Aid had been validly claimed by the charity. It will also look into concerns relating to legal action taken by the charity regarding a dispute between the charity and another UK registered charity.

Inquiry report

The Commission has published its inquiry report into Kids Integrated Cancer Treatment (1129394) and see this press release from the Commission.

The Commission concluded there had been mismanagement and misconduct by the trustees, including:

  • unauthorised payments to trustees
  • repeated failure to avoid or manage conflicts of interest
  • inadequate financial controls and failure to keep and maintain accounting records
  • the submission of inaccurate and misleading information to the Commission about the remuneration of trustees

The Commission also concluded that it was not possible to conclude the charity was operating for the public benefit because the trustees were unable to demonstrate, to the Commission’s satisfaction, that the charity’s assets were used solely to support or carry out its purposes. The charity has now ceased operating and was removed from the Register in 2015.

Case report

The Commission has published a case report into Our Brave Heroes, an organisation which was registered at Companies House but was not a registered charity. The report relates to the sale of lottery tickets by a fundraising company, First Promotions Ltd, which was calling Our Brave Heroes a charity and providing its company number as a registered charity number.  The fundraising company was not making it clear that only 20% of the money raised from the lottery tickets was going to Our Brave Heroes, with the remainder going to the fundraising company.   

Safer giving advice

The Commission has issued safer giving advice in relation to the humanitarian crisis in East Africa.

Tax and VAT

HMRC has published the minutes of the January 2017 Charity Tax Forum meeting.


Brexit plan and negotiations

The Government launched its Brexit website, Plan for Britain last week. The website sets out information about leaving the EU, FAQs and the Government’s 12 objectives for the Brexit negotiations ahead previously outlined in the Government’s White Paper.

Charity sector developments

Sir Stuart Etherington, chief executive of the National Council for Voluntary Organisations, spoke last week about  the importance of charities having a voice in Brexit.

BOND has published an international development charter for the UK’s exit from the EU.  The charter lays out six key principles to get the best deal for the world’s poorest people from the UK’s departure from the EU.


The House of Lords Library has published a briefing on the relationship between the UK and Ireland, and the impact that leaving the EU will have on this.


Registration with the Fundraising Regulator

Registered charities in England and Wales can now apply to register with the Fundraising Regulator. Organisations which have paid the fundraising levy will already be registered with the Fundraising Regulator and should have access to the badge.The cost – for charities that have not paid the levy – is £50 in return for which the charities will receive access details for the Registration Pack – containing the ‘Registered With’ badge in several formats and guidelines for badge usage.  Registration will be opening to third party organisations and non-registered charities between April and May 2017.

Code consultation

The Fundraising Regulator is planning to conduct a webcast with the Institute of Fundraising at the end of March that will discuss the consultation themes in more detail.  The FR has called for the sector to submit questions in advance so they can be addressed in the webcast. All questions should be sent via email to [email protected] by Wednesday 22nd March.  The webcast will be released the following week.


As you have probably seen in the media, last week, by unanimous decision in the long-running case of Ilott v Mitson, the Supreme Court overturned the Court of Appeal’s six-figure award in favour of an adult child out of a gift left to charity, and reinstated a much smaller sum awarded to her almost 10 years ago. See here for the Supreme Court judgment and here for comment from BWB’s Leticia Jennings and Robert Oakley.

Also see under Data Protection below.

Social finance

Greensleeves Care charity raises £33m from bond issue in less than a week

Civil Society Media reports that Greensleeves Care, a charitable care home provider, has raised £33m in less than a week from a bond issue, making this the largest bond amount raised so far by an operational charity. The amounts raised will be used to purchase and develop new homes and sites. The bond has a 4.25% interest rate, with the capital repayable in 9 years’ time. The bond will be issued through Allia’s Retail Charity Bond platform, which means it will be listed on the London Stock Exchange, and investors are able to buy or sell their bonds at any time on the Exchange’s Order book for Retail Bonds. It is open to individuals as well as institutions. Further details of the bond can be found here:

SIFI profile: Resilient Scotland

In a new series profiling social investment finance intermediaries (SIFIs), Pioneer’s Post has focused this week on Resilient Scotland. This entity was originally founded as a corporate trustee of JESSICA (Scotland) Trust, with Resilient Scotland being the business managing a £15m endowment given to the Trust by Big Lottery Fund Scotland. This endowment is due to be dispersed over ten years, with spending focusing on projects that contribute to the sustainable regeneration of areas and communities affected by long-term economic decline. Pioneer’s Post notes that Resilient Scotland is notable for being one of the very few organisations that lend below £60,000, with two offerings: Start & Grow, which offers between £10,000 and £60,000 to early-stage social ventures and Making Enterprise Happen, which starts from £61,000 and goes up to £500,000 for those organisations scaling up. Further details of Resilient Scotland’s model and work can be found here.

ESELA Annual Conference 2017

The European Social Enterprise Law Association (ESELA) are holding their Annual Conference, Teaming Up in the Middle: How do business and nonprofits jointly create social impact? on Friday 28th April in Brussels. Click here for more information and to book your place.

Social enterprise

See here for 5 reflections from Social Enterprise UK’s latest health conference from Nick Temple, Deputy CEO.

Children’s services

The government has announced details of projects across the country that will share £36m, aimed at improving the lives of vulnerable children.


See under Social enterprise above.

The Local Government Association and Volunteering Matters have published this report about how public health and the voluntary, community and social enterprise sector are working together. 

NAVCA has published its annual survey on relations between the voluntary sector and the local health and care system.

Housing and homelessness

See this press release about how government is “transforming the way councils fund homelessness services”.

International development

See under Brexit above. 


The Office for National Statistics has published a review of volunteering statistics.

Data protection

A reminder that the Information Commissioner’s consultation on consent guidance closes on 31st March. See here for more details.

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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 22, 2017.