Bates Wells Briefing for Charities and Social Enterprises | 01 December 2017

Bates Wells Highlights

Charities, Social Enterprise

Big Society Capital has published a new guide to Donor Advised Funds (DAFs).

The Information Commissioner’s Office has published a Guide to the General Data Protection Regulation.

At a glance

The three UK charity regulators have published guidance for auditors and independent examiners “Reporting of relevant matters of interest to UK charity regulators.

Various sector bodies have published comment on last week’s Budget.

The Department for Education has published a consultation seeking views on the implementation of proposed changes to school loan schemes.

London Councils has announced that a health and social care devolution agreement had been signed in relation to London.

The Department for Communities and Local Government has announced that housing associations will be re-classified as private bodies.

The new Finance Act has brought into force a change to corporation tax rules allowing national governing bodies to get a tax deduction for expenditure on grassroots sporting activity.

Charity Commission

Guidance for auditors and independent examiners

The Charity Commission, together with the Office of the Scottish Charity Regulator (OSCR) and the Charity Commission for Northern Ireland (CCNI) have published guidance for auditors and independent examiners “Reporting of relevant matters of interest to UK charity regulators”.  This is the first time the regulators have provided examples on where reporting would be helpful by auditors and independent examiners when reporting matters that are relevant but not a legal requirement to report.

Grenfell Tower

The Commission has published information about charitable grants for individuals and families affected by the Grenfell Tower fire.

New inquiries

The Commission has:

  • Opened a new statutory inquiry into Into the Light Ministries, registered charity number 1143539. The inquiry will focus particularly on whether:

The Commission will also consider to what extent the charity operates for the public benefit, and whether there has been mismanagement and/or misconduct.

  • Opened a statutory inquiry into Grove Mountain, registered charity number 1162684, and has frozen the charity’s bank accounts. The charity provides books to the Caribbean for educational purposes.  After concerns regarding the charity’s finances were raised with the Commission by a third party, the Commission found that the majority of the charity’s income for the year was withdrawn in cash and that there was a pattern of large cash withdrawals being made shortly after donations or identical amounts had been deposited.  A statutory inquiry has therefore been opened to examine whether:


With everything nearly in place for charitable companies to be able to convert to CIOs from January 2018, the Charity Commission has announced that a new CIO containing a “sensitive word or expression” in its name, wishing to register after 1 January, will need to attach a letter of non-objection from Companies House as part of its application for registration as a CIO.  (In some circumstances the view of another government department or body may be needed).

For applications before 1 January, where the CIO contains a sensitive word or expression in its name:

  • The Commission is also expecting a letter of non-objection from Companies House for applications submitted on or after 1 December 2017 (“Failure to do so will cause delays”)
  • For applications made before 1 December, the Commission will contact you on an individual basis if you need a letter of non-objection.  (Presumably if it looks as though the CIO will be registered before 1 January, you won’t need one)

Here is the Charity Commission guidance.

Tax and VAT

See under Sport below.

Changes to Gift Aid donor benefit rules – see under Budget below.


This is the government’s “25 things you need to know” about the Budget.  As you probably know, the announcements included:

  • The Gift Aid donor benefit thresholds are to be simplified – see this summary from Charity Tax Group.
  • The government is to maintain the current VAT threshold of £85k for two years from April 2018 but will consult on the design of the threshold.  

Various sector bodies have published comment on the Budget:


Charity sector implications

Charities face losing at least £250m a year after Brexit, according to new research from the training and publishing charity the Directory of Social Change. The research paper, which is called What Does Brexit Mean for UK Charities’ European Union Funding?, says that charities benefited from £258.4m in EU funding in 2015, with £210.9m of that figure awarded to 295 charities in funds administered directly by the European Commission. The paper, which is based on data published through the European Commission’s financial transparency system and by the UK government in 2015, says another £47.5m was awarded to 113 UK charities from European structural and investment funds that were from the EU but allocated by the UK government. But the report says the figures are minimum levels of funding because only one year’s worth of funding was analysed and because charities often benefit indirectly from other forms of EU investment.


The Government has published a Technical Note on citizens’ rights, seeking to clarify aspects of its proposal for EU citizens’ rights post Brexit.


Fundraising Regulator

The Fundraising Regulator is seeking to appoint at least three new board members.


The Department for Education has published a consultation seeking views on the implementation of proposed changes to school loan schemes.  The consultation follows a previous consultation that took place in March 2017 on the changes to criteria for agreeing loan schemes. The DfE aims to address points that were raised in responses to the earlier consultation on the technical implementation of the changes to agreeing local authority loan schemes for local authority maintained schools.  The consultation seeks views on:

  • How breaches to the criteria for loan agreements will be challenged.
  • When the changes to the criteria will come into force.

Responses to the consultation can be submitted on the DfE website, and the consultation closes on 13 December 2017.

The House of Commons Library has published a briefing paper on frequently asked questions concerning academies and free schools.

Health and social care

London Councils has announced that a health and social care devolution agreement had been signed in relation to London. The agreement gives the Mayor of London, the London boroughs and the City of London and health leaders more control over health and care in the capital, and the ability to create more joined-up services for London residents. The agreement is the largest of its kind in England with over 100 organisations having been involved.  A London Estates Board will be created to support the release of capital from surplus NHS estate (the NHS in London will be incentivised to sell unused land and buildings) and land to be reinvested in London’s health and care system. This released capital will be available for primary and community care and wider public services in the capital and the release of unused land will also create the opportunity to develop more housing. The agreement follows a number of pilot projects in five areas which have taken place over the last two years, which have been examining ways of streamlining existing services.

Social finance

Big Society Capital has published a guide to empower Donor Advised Funds (DAFs), professional advisers and philanthropists with clear information, step-by-step guidelines and case studies. The guide provides a helpful introduction to (DAFs) along with actions and recommendations including exploring whether social impact investment is right for you or your clients and thinking beyond just high net worth donors. It also dispels a number of myths. For example, contrary to popular belief, social impact investment can be made, not just to charities or other regulated social sector organisations, but also to private organisations including companies limited by shares. Read the full report here.

Pioneers Post provides an update on Access’ Growth Fund. It is expected that the whole Growth Fund programme will be committed by the spring of 2018. Organisations looking to make loans to charities and social enterprises in England have until December to apply by submitted an expression of interest to Access Foundation. Seb Elsworth (CEO of Access) expects close to £55m to be available to the sector through the Growth Fund.

Pioneers Post collates reactions to the Autumn Statement. Although the budget included measures to reduce homelessness, changes to Universal Credit and new funding for the NHS, there was no mention of a boost in funding for social care or of social enterprises generally. As such, “The Chancellor has not recognised that the structure of the economy and business itself must change to deliver the prosperous and inclusive economy he says he wants”, Peter Holbrook (CEO of Social Enterprise UK).

Third Sector shares findings of the Institute of Legacy Management that some of their members are waiting up to six months for HMRC to complete checks on estates. As the estate can only be divided out among those named in the will after HMRC has determined if there are any outstanding taxes owed, receipt of legacy donations are sometimes delayed causing disruption to charities.

Social enterprise

ESELA will be holding its Annual Conference on 20th April next year in Milan.  See here for more details.


The Department for Communities and Local Government (DCLG) has announced that housing associations will be re-classified as private bodies as a result of changes made to their boards by the Regulation of Social Housing (Influence of Local Authorities) (England) Regulations 2017 (SI 2017/1102), which came into force on 16 November 2017. The regulations reduce the amount of local authority influence over housing associations (that is, private registered providers (PRPs)) in two ways:

  • Excluding local authorities from holding a shareholding membership of a housing association
  • Permitting local authorities to only directly appoint up to 24% of board members. This will mean that they will not have the power to block decisions taken at board level.

BWB’s Neil Lambert comments “The main impact will be for those arms’ length management organisations (better known as ALMOs) who have been set up by councils. ALMOs are semi-autonomous bodies which manage and own the social housing and councils often retain considerable control. Once the 6 month period permitted under the regulations has expired this control will be significantly reduced.  The re-classification brings to an end a degree of uncertainty within the housing sector which has led, in part, to rating agencies downgrading the sector as a whole and thus potentially increasing the cost of borrowing.”

The University of Bristol Law School (UBLS) has published a report into housing health and safety law “Closing the Gaps: Health and Safety at Home”. The report was commissioned by the housing charity Shelter, and undertaken by UBLS in partnership with the University of Kent, in response to the Grenfell Tower disaster.  The report concludes that the law in this area is outdated, complex, patchily enforced, and in need of reform.  The report recommends that a new Housing (Health and Safety in the Home) Act be introduced to modernise and simplify the current law. The report views that such an Act should be tenure neutral, relevant to contemporary health and safety issues, and should encourage proactivity by statutory authorities to improve health and safety measures where applicable.  In particular, the report suggests that the Act should:

  • Strengthen duties on local authorities to review housing and enforce housing health and safety standards, and introduce a new duty to review and update all guidance relating to health and safety in the home every three years.
  • Provide routes for occupiers to require local authorities to carry out housing health and safety assessments.
  • Place clear responsibilities on bodies for breaches of fire and building regulations.

Fatih based organisations

Civil Society Media reports Baroness Warsi has accused the Charity Commission of a “disproportionate” focus on Muslim charities in its investigatory work.


The new Finance Act has brought into force a change to corporation tax rules allowing national governing bodies to get a tax deduction for expenditure on grassroots sporting activity.  For some national governing bodies, this means they may no longer need to fund grassroots sport via an associated charity – although there are still potential advantages for some in doing so.  There is also a new tax relief for businesses to give grants of up to £2,500 to local clubs  – this might help clubs looking to raise funding from local businesses.

Elections and campaigning

The Electoral Commission has re-opened an investigation into Vote Leave’s EU referendum spending, following the initiation by a campaign group, The Good Law Project, of legal action against the commission over its original decision to drop the investigation.

Data protection

A London firm behind over 156,000 spam texts has been fined £45,000 by the Information Commissioner’s Office (ICO).  It brings the total nuisance marketing fines issued by the ICO so far this financial year to £2 million.

The Information Commissioner’s Office (ICO) has issued these two statements about the Uber data protection breach which came to light last week. 


The Information Commissioner’s Office has published a Guide to the General Data Protection Regulation (GDPR).  It “explains the provisions of the GDPR to help organisations comply with its requirements. It is for those who have day-to-day responsibility for data protection”.  The ICO describes the Guide as “a living document” which it is “working to expand” in key areas. It includes links to relevant sections of the GDPR itself, to other ICO guidance and to guidance produced by the EU’s Article 29 Working Party.

NCVO has published this blog “Data protection and GDPR – Five things for trustees to know”.

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All content on this page is correct as of December 1, 2017.