Bates Wells Briefing for Charities & Social Enterprises | 9 January

Bates Wells highlights

Charities, Social Enterprise

Happy New Year! We wish you the very best for 2019.

This week’s Briefing covers the three week period from 17th December to 7th January.

At a glance

The Charity Commission has published a report setting out the results of its post-implementation review of The Charities (Total Return) Regulations 2013.

The Department of Health and Social Care has published EU exit operational readiness guidance for the health and social care sector.

The Information Commissioner’s Office has published detailed guidance on contracts and liabilities between controllers and processors.

The UK government is carrying out a review of the UK’s progress towards the United Nation Sustainable Development Goals.

Charity Commission

Total Return regulations

The commission has published a report setting out the results of its post-implementation review of The Charities (Total Return) Regulations 2013. The report concluded that some minor technical improvements should be made; these led to amendment Regulations being made on 20 December which will came into force on 1 January 2019.

There is a minor change to the definition of “relevant percentage” in Regulation 2 so that it is clear that the percentage should be calculated by reference to the most recently published version of the relevant inflation index. Regulation 6(2) now reads: “The trustees must exercise their powers in relation to a relevant fund in such a way as the trustees, acting in good faith, reasonably believe will not prejudice the ability of the charity to further its purposes now and in the future”, making it clear that trustees can only act on what they could reasonably be expected to know and consider at the time of their decision.

Charity names

The commission has updated its guidance on charity names to include information about the use of sensitive names for CIOs. Although Companies House consent is required for a CIO to use a sensitive expression in its name, Companies House do not need to consent if the only sensitive word in the name is charity, charitable, association, foundation or trust.

Regulatory alert to think tanks

Before Christmas we reported that the Charity Commission had issued a regulatory alert to charitable think tanks which sets out new “guidance” on a range of issues. BWB Partners Luke Fletcher and Simon Steeden have published this Briefing on the guidance, setting out a number of concerns we have about its content. If you would like to be involved in any discussions relating to the new guidance and potentially help BWB prepare a response on behalf of our clients, please contact Simon Steeden or Luke Fletcher. Note, some of the broader issues in the alert in relation to charitable education will also be of interest to a range of educational charities.

Accounts Monitoring Review

In the latest installments of the commission’s accounts monitoring review, the commission has published the following reports: a follow-up report to its review of the reporting of matters of material significance by auditors; public reporting by charities in their annual report and accounts and public benefit reporting by charities. In its press release accompanying the latest reports the commission says that the quality and transparency of charity accounts has fallen, with 70% of trustees’ annual reports and accounts in the public reporting review meeting the Commission’s basic benchmark of user requirements, compared with last year’s 74%.

New inquiry

The commission has announced that it has opened an inquiry into The Mohiuddin Trust (1105585). In its press release, the commission says it is concerned that the charity, which was subject to a previous statutory inquiry, is subject to mismanagement due to an internal dispute which has led to doubt as to whether there are currently any validly appointed trustees.

IM appointment

The Commission has appointed an interim manager (IM) to Jole Rider Friends (1112914) to take over full control of the day-to-day management and administration of the charity. The Commission opened a statutory inquiry into the charity in September 2017 as the trustees had failed to submit their charity’s annual accounts on time for two financial years; the charity’s 2015 accounts, when submitted, contained an independent examiner’s report which highlighted concerns surrounding potentially unauthorised payments and the charity’s stock control. The commission issued orders to restrict expenditure by the trustees in September 2017, which the trustees appealed to the Charity Tribunal, but were unsuccessful in their appeal. On 2 January 2019, both trustees of the charity were suspended by the Commission, and the IM appointment made. The IM is acting on a pro bono basis.

Charity law cases

In the First Tier Charity Tribunal, two trustees sought leave to file a late appeal against the opening of a Charity Commission inquiry over a year ago. The Tribunal has, unsurprisingly, refused to grant an extension of time for filing the appeal, particularly because one of the trustees has already brought other appeals in the Tribunal relation to the exercise of the Commission’s powers during the inquiry. See Swettenham –v- Charity Commission.


Cecile Gillard, Bates Wells’ Company Secretarial Manager, has written for ICSA (The Governance Institute) Governance and Compliance magazine on a review of 2018 in the world of Charity Governance. Cecile discusses new guidance that came into place in 2018 and what may hold for the future of charities. To read Cecile’s full article, please click here.

Tax and VAT

HMRC has announced its top 10 prosecutions of 2018 – they include a church leader from Luton who lied about charity donations to fraudulently claim £150,000 Gift Aid repayments, and was jailed for 4 years.

HMRC has announced in its December 2018 newsletter that it will be updating its trust registration service at the beginning of the summer 2019. It has also confirmed that it will be publishing a consultation this winter on how the UK interprets and implements the requirement in the Fifth Anti-Money Laundering Directive for all express trusts to register, whether they pay tax or not (which would affect charitable trusts).


The government has issued updated policy directions to the Heritage Lottery Fund in its role as a distributing body of National Lottery funds.

Between now and July 2019, the UK government is carrying out a review of the UK’s progress towards the United Nation Sustainable Development Goals. In July, the UK will present its Voluntary National Review at the UN’s High Level Political Forum. To inform the review, the government wants to hear from a wide range of stakeholders either through the Voluntary National Review website or directly at a variety of events planned to take place across the country. The Government encourages any group, organisation, or individual contributing to the implementation of the Sustainable Development Goals in the UK to share what they are doing.

The government has commissioned a new study to get better value from public sector intellectual property and know-how.



The Department of Health and Social Care (DHSC) has published:

Data protection

The Data Protection, Privacy and Electronic Communications (Amendments etc.) (EU Exit) Regulations 2019 have been finalised. The Regulations make amendments to the UK data protection legislation with the aim of ensuring that the UK legal framework for data protection functions correctly after exit day. In particular, the Regulations:

  • create a single regime for general processing, known as the “UK GDPR”;
  • preserve the extra-territorial applicability of the EU GDPR to cover controllers and processors outside the UK;
  • deal with the international transfer of personal data by introducing powers for the Secretary of State to make “adequacy regulations” and issue standard contractual clauses; and
  • amend PECR to add the EU GDPR definition of consent.

The Regulations come into force on exit day, although the provisions amending PECR come into force on 29 March 2019, irrespective of whether there is a transitional period. This statutory instrument will be subject to the affirmative resolution procedure.

Data protection

See under Brexit above.

New ICO guidance

The Information Commissioner’s Office (ICO) has published:

  • detailed guidance on contracts and liabilities between controllers and processors.
  • detailed guidance to help organisations decide if they are acting as a controller, processor or joint controller when processing personal data. PLC says “The guidance includes numerous practical examples, and contains lists of the decisions which can only be taken by controllers, and decisions which may be taken by processors in relation to the data processing. In certain circumstances, where allowed for in the contract, a processor may have discretion over how the processing takes place using its own expertise. The ICO recognises that it can be difficult to apply the definition of processor in the complexity of modern business relationships. The key is to determine each party’s degree of independence in determining how and in what manner the data is processed as well as the degree of control over it.”

ICO fines

See below under Health and social care.

New statutory National Data Guardian for Health and Social Care

See below under Health and social care.


Victoria Hordern, Head of Data Privacy at Bates Wells, has written an article which delves into the impact GDPR has had on the ongoing debate around the legal concepts of ‘controller’ and ‘processor’. The piece, “EU: more complexity for the controller and processor concepts under the GDPR?”, was published in the November issue of DataGuidance, a key port of call for those looking to keep up-to-date with the latest developments in the field of data protection. In her article Victoria “highlights the key issues on which entities may still require further clarification”, and stresses how it is still often difficult, in situations involving multiple parties, for organisations to identify their responsibilities under the GDPR. Victoria also explains how this has significant implications for contractual negotiations, especially with respect to how contract negotiations for services may now be preceded by a preliminary discussion concerning which party is data processor and which is the controller. If you’d like to read more about this topic, make sure to read the rest of Victoria’s article here.


Looking back/ahead

The Institute of Fundraising’s Peter Lewis has written this article reflecting on 2018 and the IoF team have also shared their personal favourite fundraising campaigns from 2018.

The IOF’s Daniel Fluskey has written this article looking ahead to what’s in store in 2019 and Rob Cope, Director of Remember a Charity has written this article about what’s in store for legacies in 2019.

Children’s services

The government has:

  • announced a £9m programme to provide disadvantaged children with free meals and activities during the school holidays. Organisations from across the country have been invited to bid to deliver holiday clubs for pupils eligible for free school meals during the 2019 summer break.
  • Announced an extra £12m funding for the Adoption Support Fund.


Also see above under Charity Commission, Regulatory alert to think tanks.


The government is planning to make health education compulsory in all state-funded schools. Under the proposed new guidance, by the end of secondary school pupils will be taught how to administer CPR, the purpose of defibrillators, and basic treatments for common injuries.

The Education Secretary has urged all schools to eliminate their use of single use plastics by 2022.

The Court of Appeal has allowed Ofsted’s appeal against a decision of the High Court that the absence of a substantive means of challenging the findings of an Ofsted report into a school, vitiated that report. Ofsted’s appeal would be allowed as, although there was no right to challenge the substantive judgments on the school through the complaints system once the report had been finalised, additional safeguards had been provided for the school at the stage prior to finalisation of the report. Those additional safeguards derived from sections 13(1) and (2) of the Education Act 2005 and from Ofsted’s school’s inspection Handbook. The available safeguards entitled a school to raise issues with the conduct of the inspection and then to escalate those to a step 1 complaint procedure. Schools could also raise concerns at the draft report stage and additional quality assurance measures had to be implemented before a school could be judged inadequate, including the requirement that such a judgment had to be authorised by or on behalf of the Chief Inspector. Such a system of protections and quality assurance measures meant that there was no basis for finding that the failure to provide a substantive right of appeal against the report’s judgments invalidated that report. Case: Ofsted v R (Durand Academy Trust) [2018] EWCA Civ 2813 (21 December 2018)

Also see under Sport and Health below.

Health and social care

See under Brexit above.

New Philanthropy Capital has announced it will be leading a consortium of partners who have been appointed as evaluation and learning providers for the Building Connections Fund—an £11.5 million investment to tackle loneliness, funded by the UK Government, the Big Lottery Fund and the Co-op Foundation. NPC’s role will be to capture the impact of the Fund on reducing and preventing loneliness and support capability building of grant holders.

The NHS is to work with schools and colleges to make expert mental health support available to a population of more than 470,000 children and young people across England.

The government has announced a major redesign of maternity and neonatal services.

A new government report outlines better care principles for women experiencing mental ill health, including taking into account individual and gender-specific needs. The report outlines a series of recommendations to be led by the Department of Health and Social Care and its arm’s length bodies. The recommendations include:

  • clearly considering women’s needs in all future mental health policy development
  • improving trauma-informed care
  • recognising that women’s identities, and often their roles as mothers and carers, are important in individual treatment and in-service planning
  • ensuring the safety of women in residential mental health care by ending breaches of single-sex wards, and improving practice and reporting processes around sexual harassment and sexual violence.

The Information Commissioner’s Office has begun formal enforcement action against care homes that have failed to pay the data protection fee.

Just before Christmas, the Health and Social Care (National Data Guardian) Act 2018 received Royal Assent. This Act places the role of the National Data Guardian for Health and Social Care on a statutory footing and gives the Data Guardian power to publish guidance about the processing of health and adult social care data in England. Local authorities and health services will be required to have regard to guidance issued by the Data Guardian when exercising their social care and health functions. The current Data Guardian is Dame Fiona Caldicott who was appointed to the role in 2014. The Data Guardian is sponsored by the Department of Health and Social Care, but operates independently, representing the interests of patients and the public.

Social finance

CAF has released a free to use tool which allows charities to research and build virtual portfolios from a selection of funds. The tool provides the ability to monitor and compare performance and share results with trustees. A short video introduction to the Investment Explorer can be found here.


A new £675m Future High Streets fund will “help local leaders implement bold new visions to transform their town centers and make them fit for the future”.

The First-tier Tribunal (FTT) has held it is possible to claim compensation under the Localism Act 2011 assets of community value (ACV) regime for the loss or expense arising from the listing of an asset. St John’s Ambulance (SJ) had put a hall it owned up for sale with a bid of £135,000 being received and accepted. Subsequently, a community group nominated the hall for inclusion on a local authority’s list of ACVs resulting in the bidder withdrawing from the sale. SJ then sold the hall at auction for £80,000 and sought compensation from the local authority under regulation 14 of the Assets of Community Value (England) Regulations 2012 (SI 2012/2421). St John Ambulance v Teignbridge District Council (2018) (CR/2018/0003)


See under Equality below.

Faith based organisations

See under Tax and VAT above.


The Education Secretary Damian Hinds has called on leading sporting bodies to work with schools and help more children play competitive sport.


The government has announced 12 broad action points in response to the Women and Equalities Select Committee’s report on sexual harassment in the workplace that was published in July 2018. The action points are comprised of recommendations that the government has accepted and will start to implement straightaway; proposals for consultation; and various other commitments. The main announcement is that the government will ask the Equality and Human Rights Commission to develop a statutory code of practice on sexual harassment. The consultations relate to proposals for a mandatory duty to protect workers from sexual harassment; how best to tackle third-party harassment; protection of interns and volunteers; the possible extension of time limits; and the better regulation of non-disclosure agreements. There are no firm timescales for any of the announced measures.


The Law Commission has published a consultation “Re-invigorating commonhold – the alternative to leasehold ownership”. Commonhold is a form of freehold property ownership created by the Commonhold and Leasehold Reform Act 2002. It enables individual properties within a building or larger development to be owned on a freehold basis. It provides a structure to manage the relationship between these separate freehold properties (such as flats within a block of flats or houses on an estate) and to manage any common parts shared between them (the common parts). This may be of interest to organisations which own property either to let, or for investment purposes.


OSCR has published a blogpost about the Scottish Fire and Rescue Service’s Community Asset Register (CAR).


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 January 9, 2019.