Bates Wells Briefing for Charities and Social Enterprises | 11 July 2017

Bates Wells Highlights

Charities, Social Enterprise

Extension to transparency requirements

Last month further transparency requirements were introduced affecting some charities and social enterprises. See today’s Briefing for details.

Save the date!

Save the date for BWB’s Annual Charity & Social Enterprise Tea Party 2017 on 2nd October. See below for more details and to book your place.

At a glance

HMRC has published an annex to its Gift Aid guidance explaining how the Gift Aid declaration ‘authorisation’ process works.

The Fundraising Regulator has published its first Annual Report.

The Commission on the Donor Experience has published a series of resources.

The Information Commissioner’s Office has updated its subject access request codes of practice.

Charity Commission

Paula Sussex interview

On Monday 10th July, Paula Sussex was interviewed on BBC Radio 4’s Woman’s Hour as she comes to the end of her tenure as Chief Executive of the Commission; the episode is available via BBC iPlayer.

New investigations

The Commission has announced that it has opened a statutory inquiry into Anaya Aid (1152971) a charity with objects to provide humanitarian aid internationally during emergency or disastrous situations.  The case originated due to concerns about cash couriering, as a trustee and a former trustee of the charity, and later the same trustee on a separate occasion, were stopped by UK Ports Officers and cash belonging to the charity was seized. After the first incident, the Commission advised the trustees of the inherent risks involved in cash couriering and the need to safeguard the charity’s funds, a subject on which the Commission recently issued a regulatory alert.

The Commission has also opened an inquiry into Chesed Leyisruel Trust (1141178) a charity with objects for the relief of poverty in the Jewish community and more widely and also for the advancement of Jewish Orthodox education and religion.  The charity failed to file its accounting information for the financial year ending 31 March 2016 by the deadline despite frequent reminders from the Commission. This failing was exacerbated by the fact the charity was previously included in the class inquiry into “double defaulters” after it failed to submit its annual accounting information for the financial years ending 31 March 2014 and 2015. The Commission said that the trustees’ continuing non-compliance so soon after exiting the Commission’s class inquiry which covered the same issue is of serious regulatory concern and warrants investigation by the Commission.


npfSynergy has published A trusted role – The challenges of creating an effective trustee board”

Tax and VAT

HMRC has published an annex to its Gift Aid guidance explaining how the Gift Aid declaration ‘authorisation’ process works.   The authorisation process enables a donor intermediary to obtain authorisation from a donor to create Gift Aid declarations on the donor’s behalf for that donor’s gifts in the rest of the tax year.


From last month, Charity Finance Group has launched a guide to help small charities counter fraud. The guide, The Small Charities Guide to Preventing Fraud looks at measures that charities can put into place to help them stop fraud.  CFG has also produced a The Charities Counter Fraud Checklist. This checklist is designed to help charities to establish (or strengthen) their counter-fraud policy. The checklist asks ten essential questions that all charities should be thinking about when working to tackle fraud.

Extension to transparency requirements

As previously reported, on 26 June 2017 the beneficial ownership provisions of the Fourth Money Laundering Directive were implemented in the UK via The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 and The Information about People with Significant Control (Amendment) Regulations 2017. 

The new rules have the following implications for charities and social enterprises:

  • Companies (including CICs, charitable companies and trading subsidiaries) already within the scope of the “People with Significant Control” (PSC) regime now need to file changes to their PSC information with Companies House when they occur, rather than in the company’s confirmation statement. 
  • UK companies listed on AIM or the NEX Exchange Growth Market are now subject to the PSC regime and need to keep PSC registers.  This change also has implications for companies with an AIM or NEX Exchange Growth Market company in their chain of control, which may need to make changes to their own PSC registers.
  • Incorporated organisations which are “unregistered companies” under the Companies Act 2006 are now subject to the PSC rules and need to keep PSC registers.  Some Royal Charter bodies are unregistered companies.   This change means that companies with unregistered companies in their chain of control may need to make changes to their own PSC registers.
  • Most charitable trusts need to keep information about their “beneficial owners”, such as their trustees and settlors to hand, including dates of birth and national insurance numbers.  In certain circumstances they will be required to identify their beneficial owners to third parties.  If charitable trusts are required to pay tax, they will need to file beneficial ownership information with HMRC.

CIOs are not currently required to keep PSC registers.

If you have any queries about how your charity or organisation may be affected by the new rules, please get in touch with your usual BWB contact.


European Court of Justice

The Institute for Government has published an analysis paper on Brexit and the European Court of Justice. It sets out the key questions and trade-offs for the UK government as it begins to legislate for a new relationship with the Court of Justice of the European Union (CJEU) after Brexit. The IFG’s paper argues that ministers have left fundamental questions unanswered on the status of European Court decisions after the UK leaves the European Union and that Parliament must clarify the future of the UK’s legal system after Brexit.


“Brexit Health Alliance” (BHA) has been formed to bring together a diverse range of UK stakeholders in the healthcare industry and provide a single voice for the sector on Brexit-related issues. Members of the BHA include NHS organisations such as NHS Confederation and NHS Providers, industry associations, universities, research organisations and charities, the Royal Colleges, the Association of the British Pharmaceutical Industry (ABPI), the Association of British Healthcare Industries (ABHI) and the BioIndustry Association (BIA). The BHA will be co-chaired by Sir Hugh Taylor (the former permanent secretary at the UK’s Department of Health) and Niall Dickson (chief executive of the NHS Confederation).

The NHS European Office has created a Q&A document for the NHS on the Great Repeal bill, which aims to ensure legal continuity on the day the UK leaves the European Union.


The House of Lords has published a paper on Brexit and fisheries, whilst the UK begins to withdraw from the London Fisheries Convention.


Fundraising Regulator (FR)

The FR has published its first Annual Report, and accompanying 4 page Annual Review.  The accompanying announcement says the FR has “issued eight decisions following investigations” – these are published on its website as anonymous case studies.  They are separate to the single adjudication into the fundraising agency Neet Feet and charities using its services. 

Civil Society Media reports Lord Grade will serve as Chair for another year, and Stephen Dunmore will remain as Chief Executive until the end of 2017.

Fundraising Preference Service

This went live last week – see:

  • the main website here
  • here for a list of FAQs

Civil Society Media reports the FPS saw a total of 1,312 requests for suppressions in less than 12 hours on its first day of launch.

For a reminder of the key elements of the FPS, see this briefing from BWB Solicitor Alistair Williams here.

Commission on the Donor Experience

The Commission on the Donor Experience, which was formed in March 2016 in response to media scrutiny of fundraising practice, has published a series of resources including: 

For comment on the Commission’s report:

Also see under Scotland below.



The House of Commons Library has published a briefing paper on safeguarding responsibilities of schools in England. 

Higher education and research

Universities and Science Minister Jo Johnson has confirmed the government is investing £100 million to attract highly skilled researchers to the UK through its new Ernest Rutherford Fund.The Rutherford Fund will provide fellowships for early-career and senior researchers, from the developed world and from emerging research powerhouses such as India, China, Brazil and Mexico, helping to “maintain the UK’s position as a world-leader in science and research”.

Health and social care

See under Brexit above.

The Care Quality Commission has published its report “The state of adult social care services 2014 to 2017.

The Local Government Lawyer “Adult Social Care 2017 report” has been published, in association with LexisNexis.

The Local Government Ombudsman has announced that it has changed its name to the Local Government and Social Care Ombudsman (LG&SCO). The reason for the name change is to increase awareness that the organisation looks at complaints about all areas of adult social care, including privately arranged or funded care.

Social finance

Big Society Capital announces new social investment focus

Pioneer’s Post reports on Big Society Capital’s (BSC) new strategy. BSC will focus on providing investment for homes for people in need, supporting communities to improve lives and on early intervention programmes. Although this might be an indication of BSC’s focus, David Floyd (managing director of Social Spider CIC) shared that investment applicants still benefit from wide parameters and that “there’s potential for just about anything to fall under this strategy if organisations would like it to”.

£30m SASC loan revamped after low take up

After a low take up of SASC’s £30 Third Sector Loan Fund, this has been renamed to the Third Sector Investment Fund. Pioneer’s Post reports that the new fund offers more flexible investment and repayment options and features greater risk sharing and more dedicated support and guidance for investees.

Mixed reactions to new charity authorised investment fund (CAIF)

Civil Society reports on the CAIF model of charity specific funds launched in October 2016. Although some investment managers were eager to convert existing common investment funds (CIF) to CAIFs, others were hesitant. Civil Society suggests this might be because CAIFs are untested or because converting to a CAIF from a CIF can be a complex, time consuming and expensive process. However, the Charity Commission will not be authorising any new CIFs, so any new charity specific funds are likely to be CAIFs.

Simon Chisholm from the Resonance Bristol SITR Fund has written this blog about “Reporting on social impact investment – what is meaningful?


NCVO has published this article about volunteering during the General election and possible lessons for charities.


The closing date for responses to the consultation addressing caste discrimination in the UK has been extended by 8 weeks from 18 July 2017 to 18 September 2017 as a result of the general election.


See under Education, Schools above.

Last week the Court of Appeal in P v. Secretary of State considered the proportionality of the current Disclosure and Barring Scheme (DBS) and concluded that the regime remains inadequate and requires further amendment to secure compatibility with Article 8 of the European Convention on Human Rights (the right to respect for private and family life).  The court concluded that, while the revised DBS scheme does not necessarily breach Article 8, it may amount to a breach when applied to certain cases where the particular interference is disproportionate. See here for more details and comment from BWB.  

Data protection

The Information Commissioner’s Office (ICO) has ruled the Royal Free NHS Foundation Trust failed to comply with the Data Protection Act 1988 when it provided patient details to Google DeepMind.  The Trust provided personal data of around 1.6 million patients as part of a trial to test an alert, diagnosis and detection system for acute kidney injury. But an ICO investigation found several shortcomings in how the data was handled, including that patients were not adequately informed that their data would be used as part of the test.  The Trust has been asked to commit to changes ensuring it is acting in line with the law by signing an undertaking.  Also see this blog from the Information Commissioner, Elizabeth Denham, on four lessons learned from this case. 

The ICO has also updated its subject access request (SAR) codes of practice – see here for details.

Procurement and state aid

The House of Commons has published a briefing paper on EU state aid rules and the WTO Agreement on Subsidies and Countervailing Measures.


OSCR’s latest blogpost is an update on Fundraising in Scotland by Jude Turbyne, OSCR’s Head of Engagement.

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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 July 11, 2017.