Bates Wells Briefing for Charities & Social Enterprises | 16 May

Bates Wells highlights

Charities, Social Enterprise

The Information Commissioner’s Office has published its final guidance on consent. See comment below from Bates Wells’ head of Data Privacy, Victoria Hordern.

This week’s Briefing covers the two week period from 30th April to 11th May.

At a glance

The Charity Commission has updated some of its publications to reflect the Commission’s recent guidance on automatic disqualification and on safeguarding.

The Institute of Fundraising has published updated guidance on acceptance, refusal and return of donations.

The Fundraising Regulator has published new guidance on handling complaints and announced changes to the Code of Fundraising Practice in relation to handling complaints.

The Office for Tax Simplification is seeking views on the current inheritance tax regime to inform its simplification review.

NCVO has published its 2018 Almanac.

Charity Commission

Updates to guidance

CC3 – The Essential Trustee, CC3a – Charity Trustee: what’s involved, and CC30 – Finding new trustees have been updated to reflect the Commission’s recent guidance on automatic disqualification and on safeguarding.

New inquiries

The Commission has announced that it has opened an inquiry into Christian charity Croydon Tabernacle: The Commission’s engagement with the charity started when it examined the charity’s financial information and found cause for serious regulatory concern, including substantial unexplained expenditure and potentially conflicted payments to people connected with the charity. As a result of its concerns, the Commission has frozen a bank account controlled by the charity.

The Commission has announced that it has also opened an inquiry into Grangewood Educational Association, a charity running an independent primary school and that it has appointed Geoff Carton-Kelly and Jason Daniel Baker from FRP Advisory as interim managers of the charity. The Commission’s engagement was prompted by recent complaints about the charity’s governance and management and the Commission has frozen the charity’s bank account. The interim managers will take on full control of the day-to-day management and administration of the charity from the current trustee until the Commission makes a further order. Part of their duties will be to establish the future viability of the charity and the school it operates.

Consultation on charging

Civil Society Media reports on a speech made by Kenneth Dibble last week in which he commented that the planned consultation on charging charities for regulation has been delayed from the summer to the autumn. He also said that said following the consultation, which would likely last three months, the proposal would require primary legislation to be passed, which could be difficult due to Brexit dominating the parliamentary timetable in the coming months.


The Commission is reminding charities to prepare for GDPR.

Accounts monitoring review – double defaulters

As part of its accounts monitoring review programme, the Commission has published a report of key findings of its review into accounts submitted by double defaulting charities. The report considers the accounting documents of 45 charities that were in the class inquiry during 2016-17.

Safer giving

The Commission has issued a reminder to give safely to charities during Ramadan.

Tax and VAT

The Office for Tax Simplification is seeking views on the current inheritance tax regime to inform its simplification review. The consultation closes on 8 June 2018.


NCVO has published this summary of key findings from its 2018 Almanac.

Charity Finance Group’s latest Economic Outlook Briefing has found that inflation means that charities have to raise £3.7bn a year extra by 2020 in order to maintain their spending power from 2014/15.

The International Centre for Not for Profit Law has published a report examining how governments can effectively support civic space in the current challenging environment.

Data protection


The ICO has published its final guidance on consent. BWB’s Head of Data Privacy, Victoria Hordern, comments “The ICO’s published guidance on consent highlights the importance for organisations of only relying on consent when they can demonstrate that consent is valid. The ICO indicates that the biggest change brought in by the GDPR is the need for documenting consent mechanisms e.g. recording consent and ensuring individuals can easily withdraw consent. Other key points to note from the guidance is that organisations must name any third party controllers who will also be relying on consent as the lawful basis. Additionally the ICO warns that organisations that rely on invalid or inappropriate consent are more likely to erode trust with individuals and damage their reputation as well as potentially leaving themselves open to fines from the ICO

ICO fines

Costelloe & Kelly Ltd were fined £19,000 for undertaking a direct marketing compaign without the consent of individuals in contravention of Regulation 22 of the Privacy and Electronic Communications (EC Directive) Regulations 2003.

IAG Nationwide Ltd made unsolicited calls for direct marketing purposes to subscribers who had registered with the Telephone Preference Service in contravention of Regulations 21 and 24 of the Privacy and Electronic Communications (EC Directive) Regulations 2003. IAG was provided with an enforcement notice which prevents them from making or instigating calls to subscribers from within 35 of the notice. They cannot call in instances where the subscriber has previously notified them that direct marketing calls should not be made and where a subscriber’s number has been listed on the register of numbers kept by the Commissioner. IAG were also fined £100,000.


Fundraising Regulator

The FR has announced changes to the Code of Fundraising Practice in relation to handling complaints – this follows a consultation in Feb 2018. Rule 1.6 now states:

a) Organisations MUST have a clear and publicly available complaints procedure which MUST also apply to any Third Parties fundraising on their behalf.
b) When dealing with complaints organisations MUST ensure that:
i) complaints are investigated thoroughly and objectively to establish the facts of the case, avoiding undue delay; and
ii) complaints are responded to fairly, proportionately and appropriately.
c) Organisations MUST regularly review any lessons to be learnt from complaints and use that learning to inform future fundraising activity.

In addition, signposting has been added after rule 1.6 d) to the Fundraising Regulator’s new Complaints Handling guidance.

Returning donations

The Institute of Fundraising has published updated guidance on acceptance, refusal and return of donations.


For events with music, it is now possible to get a single licence to play recorded music from PPL PRS Ltd. This is a new joint venture between the UK’s two music licensing organisations —PPL and PRS for Music.


Civil Society Media reports Comic Relief will stop using the word “grant” to describe money it gives away to other charities because the phrase is “too paternalistic”. In an interview with Fundraising Magazine, Ruth Davison, executive director of impact and investment at Comic Relief, said the charity would not change how it gave away money, but would start referring to those gifts as “investments” instead.


See under Tax above.


Early years

New support to help parents improve their children’s early language and literacy skills at home before they start school have been announced.

Schools and academies

See this Department of Education press release which included the announcement of £50m funding to expand selective schools.

Health and social care

Civil Society Media reports care charities fear bankruptcy and are withdrawing from contracts due to the sleep-in crisis.

The Health and Social Care Secretary has written to independent healthcare providers following a “damning report” by the Care Quality Commission.

Social finance

The FCA is planning an overhaul of its authorised firms’ public register, which will start this summer, to provide a more intuitive resource for consumers. This is relevant to any FCA or PRA authorised firm or individual, such as banks, credit unions, some social investment firms and financial advisers, or those who rely on the information provided in the public register. The programme of work, which will take place over the next two years, includes making the register more user friendly, improving the search functionality and providing a free API for developers. In 2019 they will introduce a new public register for certified individuals – many key individuals, such as most Non-Executive Directors and registered Financial Advisers, will move over to this new register.

The Chief Executive of the FCA Andrew Bailey has set out the FCA’s work to tackle high cost credit. The FCA believes that access to credit can have a socially valuable function, and supports improving options for provision of credit to sub-prime consumers. Building on its price capping work in the payday loan market, announcements are expected from the FCA over the coming months regarding its proposals to further regulate this market. The FCA is also exploring the development of provision of alternatives to high-cost credit. In particular they are seeking to play a role in helping grow the profile and scale of alternative credit providers, including addressing challenges in accessing sustainable capital for this market.

Housing and homelessness

The Ministry of Housing, Communities and Local Government and the Department for Education has published updated guidance, Prevention of homelessness and provision of accommodation for 16 and 17-year-old young people who may be homeless and/or require accommodation.

The Housing Secretary James Brokenshire has awarded funding to Greater Manchester, Liverpool and the West Midlands to reduce rough sleeping.


A newly formed Heritage Council made up of key players in the heritage sector is to meet for the first time.

Charities working overseas

Civil Society Media reports legislation has passed through the House of Commons that could prevent international charities’ bank accounts being frozen. The Sanctions and Anti-Money Laundering Bill, passed on Tuesday includes plans to create general licences for humanitarian, peacebuilding, development and reconstruction activities for sanctioned countries, such as Syria. – meaning a reduced risk that charities operating in those countries are treated by their banks as being at risk of breaching sanctions.

Company law

Community interest companies – Directors’ Remuneration

The Government has proposed incidental changes to implement Corporate Governance reforms for Community Interest Companies (CICs), via secondary legislation to be published later this year. The aim of proposals is to ensure that small CICs continue to report on Director Remuneration (including pay as well as other benefits). The Accounting Directive restricted the disclosures required of small companies and removed the obligation for small companies to report on Directors’ remuneration. The transposition of the Accounting Directive therefore inadvertently created a gap by removing Schedule 3 of the Small Accounts Regulations 2008 in relation to reporting remuneration of directors when a CIC is a small company. The amendments restore the requirement for Directors of small CICs to report on their remuneration (pay as well as other benefits). Directors of large CICs will be unaffected by this requirement.

People with significant control

Companies House has published its business plan for 2018-2019, and announced plans to improve compliance with “people with significant control” or PSC regime. The proposals include:

  • Contacting companies which Companies House believes has misunderstood the PSC requirements;
  • Pursuing companies that have not provided PSC information in their confirmation statement;
  • Following up with companies and PSCs where a notice has been issued to a PSC asking for information to be supplied, or restrictions (where a PSC has not provided information).

Companies House and BEIS will gather information over the year in preparation for a review of the effectiveness of the PSC register in 2019.


The Office of the Scottish Charity Regulator (OSCR) has issued a statement about Scottish Charitable Incorporated Organisations (SCIOs) receiving letters from HMRC asking for information on business activities, saying that HMRC are looking into the issue and hope to resolve the matter shortly.

OSCR has published interim guidance on safeguarding. The announcement says that it will be doing a lot of work on safeguarding during the coming year, working closely with other partners, and this may mean there needs to be additions to the guidance; OSCR will therefore review it during the year and update accordingly.

Northern Ireland

CCNI is holding a free invitation-only safeguarding seminar for charities working overseas to provide services for children and/or vulnerable adults on 24 May.

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 May 16, 2018.