Bates Wells Briefing for Charities and Social Enterprises | 03 October 2017

Bates Wells Highlights

Charities, Social Enterprise

Last week we reported the Commission had issued updated guidance on reporting serious incidents.  We have now prepared a fuller briefing on the new guidance – see here for details.  

It was great to see so many of you at our Annual Charity & Social Enterprise Tea Party yesterday (Monday), we hope you found it an informative afternoon. If you would like a copy of the handouts, please email [email protected].

At a glance

The Financial Reporting Council is consulting on a proposed solution to current technical issues around subsidiaries gift aiding profits to their parent charity.

The Institute of Fundraising has published the results of a recent survey about charities’ readiness for the General Data Protection Regulation.

The Government has announced a further one-month suspension of minimum wage enforcement concerning sleep-in shifts in the social care sector.

The biennial State of Social Enterprise Survey has now been published.

ICSA and the Investment Association have published guidance on board engagement with stakeholders.

Charity Commission 

New guidance on reporting serious incidents

Last week we reported the Commission had issued updated guidance on reporting serious incidents.  We have now prepared a fuller briefing on the new guidance – see here for details. 

Charities and their trading subsidaries

The Financial Reporting Council is consulting on a proposed solution to current technical issues around subsidiaries gift aiding profits to their parent charity.  The FRC has issued new draft guidance “FRED 68” which proposes that the tax effects of such a gift aid payment, when it is probable that it will be made in the nine months following the reporting date, shall be taken into account at the reporting date.  This will improve the consistency of reporting between entities and the relevance of the information provided to users.

FRED 68 also discusses other aspects of the accounting for the expected gift aid payment.

Responses to the consultation should be sent to [email protected] by 20 October 2017.


Civil Society Media reports the minister for civil society Tracey Crouch has said the Government will respond by the end of October to recommendations made by the House of Lords Committee on Charities. 

Charity Tax Group has published its pre-Budget submission which identifies four key areas in which Government can support the charity sector:

  • Working with charities to ensure the VAT system is fit for the future 
  • Extending the Making Tax Digital charity exemption to wholly-owned charity trading subsidiaries that are members of a charity’s VAT group 
  • Progressing discussions relating to the reform of the Gift Aid donor benefit rules 
  • Addressing the cumulative financial and administration burden of charity taxation.


European Union (Withdrawal) Bill

The House of Lords Delegated Powers and Regulatory Reform Committee has published its first report on the European Union (Withdrawal) Bill. In addition to drawing attention to the “excessively wide law-making powers” the Bill gives to Ministers, the report recommends that Ministers should not have an “unfettered discretion” to decide whether the wide-ranging secondary legislation likely to stem from the Bill should be subject to the full scrutiny of the affirmative procedure or the less robust negative procedure.  Instead, the Committee recommends a new procedure that, where the Minister proposes the negative procedure, a Committee of each House, or a joint Committee of both Houses, should be given 10 days to overturn the Minister’s proposal and upgrade scrutiny to the affirmative procedure.


Umbrella bodies NCVO, ACEVO and UK Community Foundations (UKCF) have written to the Chancellor ahead of his Autumn Budget proposing that following the exit from the European Union, the Government uses the money previously spent on European Structural Funds to create a successor to the European Social Fund (ESF). The letter urges that the Government builds on the best aspects of ESF while addressing the ‘design flaws which have led to wasteful bureaucracy’.


The Charity Finance Group has called for a joint government and charity sector working party to decide how the VAT system should operate after Brexit. In a submission to the Chancellor of the Exchequer, Philip Hammond, before the autumn Budget, which will take place on 22 November, the CFG says there are some “significant opportunities” for charities from Brexit, in particular in charity tax, and that the government should “lay the foundation for a stronger charity sector”.


reminder that charities have less than two months to go before they are required, under the Code of Fundraising Practice, to have a fundraising whistleblowing policy in place. The deadline is 30th November.  The Institute of Fundraising has published this guidance on Whistleblowing in fundraising.

Fundraising and donor data

Stephen Service, policy manager at the FR has told Third Sector that the Fundraising Regulator’s consultation on Code changes around data will begin next month and finish in December. 

The Institute of Fundraising has published the results of a recent survey about charities’ readiness for the General Data Protection Regulation (GDPR). 

Giving platforms

Last week the Charity Commission and the Fundraising Regulator (FR) met with the Chief Executives or senior representatives from 14 of the UK’s major giving platforms.  The aim of the summit was to “collectively agree some principles that will ensure individuals are  supported when setting up or donating to online appeals, help to increase public trust and confidence in charity and online giving, and ensure that charitable resources in the short, medium and long-term are used as effectively as possible”. 

Registration of non-charities with the Fundraising Regulator

We reported last month that non-charities can now register with the Fundraising Regulator.  Last week, the FR published “5 reasons third party fundraisers should register with the Fundraising Regulator”.



See this press release recording a number of Government announcements affecting schools and university students.

Sir Theodore Agnew has been appointed Parliamentary Under Secretary of State for the School System.  He will take up a role as minister in the Lords at the Department for Education, following the retirement of Lord Nash.


The Department of Health has published non-statutory guidance for schools on the use of emergency adrenaline auto-injector devices (AAIs) 

Health and social care

On 28 September 2017 the Government announced a further one-month suspension of minimum wage enforcement concerning sleep-in shifts in the social care sector to minimise disruption to the sector and seek to ensure workers receive the wages they are owed.  Also see this accompanying press release which explains the steps the Government is taking.  


On 19 September 2017, the Secretary of State for Communities and Local Government, Sajid Javid, announced at the National Housing Federation conference that the government intends to publish a social housing Green Paper. The Green Paper will be a “wide-ranging, top-to-bottom review of the issues facing the sector…the most substantial report of its kind for a generation”.  The Green Paper will also consider (among other things) the following issues:

  • The quality of social housing and the role of social housing in building “safe and integrated communities”.
  • What more can be done to tackle homelessness.
  • How the government and social housing builders/providers can ensure that the right homes are built in the right places by matching supply and demand.

The Green Paper will also set out the government’s plans for taking the right to buy forward.

Building Bridges” a report, which has been published by the Chartered Institute of Housing, considers the tensions that exist between housing associations and local authorities and urges them to jointly develop local housing affordability frameworks to identify the required mix of homes and tenures that are needed to resolve the shortage of affordable housing.

Social finance

Pioneer’s Post covered the Social Enterprise World Forum (SEWF) held between 27 and 29 September 2017 in Christchurch, New Zealand. On the final day of the Forum, the announcement of the 2018 host city was made. The SEWF will return “home” to Edinburgh for its 10th anniversary in 2018. The Scottish Government and the British Council are partners in the event. Mairi Mackay, global head of social enterprise at the British Council, stated that the UK and Scotland are seen as global leaders in social enterprise.

Pioneers Post reports on Barclays Banks’ new impact investing fund, the Multi-Impact Growth Fund, which it has launched with seed funding from Big Society Capital (BSC). The fund offers investors a diversified portfolio across equities, bonds, and geographies. Additionally, there is no minimum investment size. Sir Harvey McGrath, chair of BSC, states that the £5m investment from BSC’s treasury portfolio demonstrates their belief in Barclays’ ability to bring impact investment to individual investors to create a positive impact on people and the planet using their personal investments.  

Social enterprise

On Thursday this week from 11-11.30 the Regulator of Community Interest Companies is running a webinar about incorporating a CIC.  See here for details. 

The European Social Enterprise Law Association (ESELA) has published its latest newsletter

Also see under Corporate Governance below. 

Social impact

This is an interesting article categorising data that charities can collect into five categories, one of which is impact data.

Data protection

See under Fundraising above.

An ex-employee of Leicester City Council, has been prosecuted at Nuneaton Magistrates’ Court for unlawfully obtaining personal data.  He took the details of service users of Leicester City Council’s Adult Social Care Department without his employer’s consent to use for a new business he had set up.  The defendant pleaded guilty to the offence under section 55 of the Data Protection Act, and was fined £160, ordered to pay £364.08 prosecution costs and a £20 victim surcharge.

Corporate governance

ICSA and the Investment Association have published guidance on board engagement with stakeholders, “The Stakeholder Voice in Board Decision Making”.


In line with a commitment made when the new system for fundraising in Scotland was introduced, an external review of the regulatory system has been commissioned by the Scottish Government. As part of this, OSCR has launched a survey on the new arrangements.

BWB Annual Charity & Social Enterprise Tea Party

We were delighted to see so many clients and sector colleagues at our Tea Party on Monday this week.  If you missed the panel discussion, see here for coverage by Civil Society Media and Third Sector.

Charity & Social Enterprise Update | Autumn 2017

Click here to view the Autumn edition of the Charity & Social Enterprise Update.

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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 October 3, 2017.