Bates Wells’ Jonathan Pearce has written this briefing about the recent Court of Appeal decision in relation to pay for “sleep-in” workers. The Court of Appeal overturned a significant body of case-law to find that sleepers-in will only be entitled to have their sleep-in hours counted for National Minimum Wage (“NMW”) purposes where they are, and are required to be, awake for the purpose of performing some specific activity.
The team preparing the BWB Briefing are taking a break over the summer. The next edition will be sent out during the week beginning 20th August. Enjoy the next few weeks!
At a glance
In the ongoing case about VAT on investment fees for Cambridge University, the questions referred to the Court of Justice of the European Union have been published.
The Independent Inquiry into Child Sexual Abuse has been fined £200,000 by the Information Commissioner’s Office (ICO) after sending a bulk email that identified possible victims of non-recent child sexual abuse.
The ICO’s annual report for 2017-18 has been published.
The Fundraising Regulator has published its Annual Review for 2017/18.
The Commission has announced that it has opened a statutory inquiry into Darul Uloom School London, a charity providing Islamic and national curriculum education to children and young people. The Commission says that it received a serious incident report from the charity after police arrested one of the charity’s trustees (who was also a teacher and designated safeguarding lead at the school) and seized weapons and cash held at the charity’s premises. The Commission has already exercised its powers under section 76(3)(a) Charities Act to suspend the individual as trustee, officer and agent of the charity. A second individual, also a trustee and headteacher at the school, was also arrested. The Commission says that the inquiry will consider the management and oversight of the charity by the trustees – including the financial management of the charity and whether conflicts of interest are being properly identified and managed by the trustees, and also the conduct of the arrested individuals.
The Commission has published an inquiry report into two charities, which were linked by shared former trustees and a shared correspondence address, Families for Survival UK (formerly registered charity number 1135545) and Save the Age Ltd, also known as Age Shelter UK, (formerly registered charity number 1152048) and has also released a press release about the case.
The Commission’s engagement with Families for Survival UK began with a complaint from a member of the public about its fundraising practices, and this led to the Commission looking into other concerns, including a lack of evidence of charitable expenditure and potentially unauthorised payments to trustees and other connected parties. The Commission’s inquiry found that there was serious misconduct and mismanagement in the administration of both charities by the founding trustees. The reasons for this finding included that: there was no evidence of activities conducted in furtherance of the charitable objects of both charities, the charities had not been and were not operating for the public benefit, the founding trustees abused their position of responsibility by using the charities as vehicles for unlawful activity, including knowingly creating and using false trustee identities, the founding trustees did not discharge their legal duties as trustees under charity law, the founding trustees abused the charities’ finances and they submitted annual returns and annual accounts containing false information to the Commission. The founding trustees are now disqualified from acting as trustees of other charities. Both charities have now ceased operating and been removed from the Register of Charities.
Tax and VAT
In the case about VAT on investment fees for Cambridge University, the questions referred to the Court of Justice of the European Union have been published. They are:
- Is any distinction to be made between exempt and non-taxable transactions for the purpose of deciding whether VAT incurred for the purposes of such transactions is deductible?
- Where management fees are incurred only in relation to a non-taxable investment activity, is it nonetheless possible to make the necessary link between those costs and the economic activities which are subsidised with the investment income which is produced as a result of the investments, so as to permit VAT deduction by reference to the nature and extent of downstream economic activity which carries an entitlement to deduct VAT? To what extent is it relevant to consider the purpose to which the income generated will be put?
- Is any distinction to be drawn between VAT that is incurred for the purposes of providing capitalisation for a business and VAT that produces its own income stream, distinct from any income stream derived from downstream economic activity?
The Independent Inquiry into Child Sexual Abuse (IICSA) has been fined £200,000 by the Information Commissioner’s Office (ICO) after sending a bulk email that identified possible victims of non-recent child sexual abuse.
ICO Annual Report
The ICO’s annual report for 2017-18 has been published. It reports:
- A significant increase in data protection complaints (up 15%), self-reported breaches (up 30%) and freedom of information complaints (up 5%).
- 26 penalties totaling £3.28m for breaches of electronic marketing laws relating to nuisance calls and spam text messages, along with 10 enforcement notices and the execution of three search warrants;
- Eleven fines totaling £1.29million for serious security failures under the Data Protection Act 1998.
The FR has published:
- its Annual Review for 2017/18.
- its July newsletter, which includes that in June it wrote to the 60 charities who spend the most on fundraising to ask them to provide data for the FR’s annual complaints report. The deadline for providing the information requested is 27 July 2018. The report will cover the period 1 April 2017 -31 March 2018 and will be published in September.
The Education Secretary has announced new online resources for teachers to reduce time spent on ‘unnecessary’ tasks and support to focus on teaching.
Following its inquiry into whether academy conversions deliver the right results for students and taxpayers, the House of Commons Committee of Public Accounts has published Converting schools to academies, Fifty-Second Report of Session 2017-19. The report includes that:
- The committee found that the checks that the Department for Education (DfE) carries out before schools convert to academies have failed to prevent a succession of high-profile academy failures that have been costly to the taxpayer and damaging to children’s education.
- The committee observed that DfE’s focus on converting large numbers of schools quickly has been at the expense of rigorous due diligence checks and risk assessment.
- The committee also noted that local authorities could incur significant costs when schools became academies, which affected their capacity to support their remaining maintained schools. A survey by the Local Government Association (LGA) suggested that the average cost to local authorities, in terms of staff time and spending on items such as legal fees, was between £6,400 and £8,400 for each maintained school that became an academy. Local authorities’ ability to fulfil their statutory responsibilities, including their duty to provide school places, was also undermined in areas where a high proportion of schools have become academies.
The Government has published the results of a satisfaction survey of students in further education. The survey of 300,000 respondents revealed:
90% of learners were satisfied with their FE provider 91% of learners were satisfied with the teaching from the FE provider 82% of learners were likely to recommend their learning provider to friends or family
See under Tax and VAT above.
Health and social care
BWB’s Jonathan Pearce has written this briefing about the recent Court of Appeal decision in relation to pay for “sleep-in” workers. The Court of Appeal overturned a significant body of case-law to find that sleepers-in will only be entitled to have their sleep-in hours counted for National Minimum Wage (“NMW”) purposes where they are, and are required to be, awake for the purpose of performing some specific activity.
A £4.2 million challenge fund to support people with mental health or musculoskeletal conditions to stay in work has been launched by the Minister for Disabled People, Health and Work, Sarah Newton, and the Minister for Mental Health and Inequalities, Jackie Doyle-Price.
The National Audit Office has published Adult social care at a glance which provides an overview of social care developments and trends in England.
Chris White, on Pioneers Post, shares his views on the announcement by cabinet office minister David Lidington to extend the Social Value Act to ensure all central government ‘major procurements’ explicitly evaluate social value (rather than just consider it). He is calling on social enterprises to work together to help government to decide that every public sector contract be covered by social value.
Rebecca McCartney (Investment Director, Big Society Capital), writes for BSC’s blog with an update on the progress made by BSC to support community lenders to reach more underserved small enterprises in disadvantaged areas across the UK.
Writing for Big Society Capital, Simon Bass (former Treasurer, Praxis) shares his experience of an unsuccessful social investment and the valuable lessons Praxis (a charity which provides practical, legal and welfare support for migrants in crises or at risk) learned. He also offers three key pieces of advice for other organisations considering taking on social investment.
The Transformational Business Network (TBN) was founded in 2003. TBN has been finding small and medium sized impactful businesses with strong core values and the capacity to grow and has been helping them to put processes and structures in place as they prepare to meet investors. Read their Impact Report which provides further information on TBN’s activities and achievements.
Civil Society Media reports that analysis of data by Social Enterprise UK shows that in the first quarter of 2018, just 12 per cent of public procurement contracts deemed suitable for voluntary, community and social enterprise organisations were actually won by such organisations. Community Interest Companies, the legal form for approximately 20 per cent of social enterprises, won just 69 contracts in Q1 of 2018, accounting for just 0.4 per cent of all public procurement. This is just a 6 per cent increase on two years’ ago.
BOND reports the International Development Select Committee has released its report into the Department for International Development’s (DFID) Economic Development Strategy. While trade and investment were recognised as important tools for helping people living in poverty and conflict, the committee highlighted risks and concerns for delivering inclusive, sustainable growth.
OSCR is publicising Scotland’s new digital health and care strategy, and a free event about the new strategy which may be of interest to third sector staff working in policy, operations, digital and/or data within health and social care organisations.
The Charity Commission for Northern Ireland has published the latest “call forward” list which names the 350 organisations which the Commission anticipates will be called forward to apply for charity registration during the remainder of the financial year, up to the end of March 2019.
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 25, 2018.