Bates Wells Briefing for Charities & Social Enterprises | 6 February

Bates Wells highlights

Charities, Social Enterprise

The Equality and Human Rights Commission has published new guidance on freedom of expression to be used by all higher education institutions and students’ unions. See today’s Briefing for more details.

We are hosting a seminar in February to help organisations who may be finding managing security incidents in compliance with the new GDPR responsibilities burdensome and confusing. Find out more and book your place here.

At a glance

The Charity Commission has published “Dealing with wrongdoing and harm”, a report setting out lessons for trustees from the Commission’s compliance work.

A new system alerting charities to when they have been left money in wills is to be established by HM Courts and Tribunals Service.

Social Investment Business has released a new report on social investment tax relief.

The Committee on Standards in Public Life has published a report on local government ethical standards.

Charity Commission

Compliance powers report – “Dealing with wrongdoing and harm”

The commission has published its report on its work dealing with wrongdoing and harm in charities in 2017-18 (the report which was previously named Tackling Abuse and Mismanagement). The main report, which is in a new format, details the lessons for trustees from the commission’s compliance work, in the following areas: insider fraud, safeguarding, reporting serious incidents, counter-terrorism, data protection and military charities. There are two separate reports containing various statistics from the year. In the press release accompanying the report the commission highlights use of its new enforcement powers since their introduction, saying that the new powers have now been used a total of 137 times. This includes disqualifying 21 and suspending 7 individuals from trusteeship, removing 12 individuals as a trustee during an inquiry, issuing 6 Official Warnings, and issuing 14 notifications of its intention to issue an Official Warning. It also highlights the increase in the commission’s safeguarding cases, with 552 new cases opened in 2017-18, compared to 302 in 2016-17 and 163 in 2015-16.

New inquiries

The commission has announced an inquiry into The Bersam Trust (526452) a Jewish charity operating from the Salford area. The commission says it has found significant discrepancies between the financial activity recorded in the charity’s accounts and the records of the charity’s bank account (which were obtained by an order under section 52 of the Charities Act 2011).

The commission has announced an inquiry into The Albayan Education Foundation Limited (1128083). The charity, whose objects include the advancement of education and the relief of individuals living in the UK and overseas who are in need or hardship, also runs a school in Birmingham. The school has been issued with critical reports by Ofsted, and statutory notices by the Department for Education under section 114(5) of the Education and Skills Act 2008. The commission is concerned that none of these issues triggered the trustees to report a serious incident to the Commission and also that the trustees have not fully implemented an action plan previously issued by the commission, which aimed to improve the management and administration of the charity.

The commission has announced an inquiry into J.E.L.A. Limited (1137349) a London-based charity with objects to improve the lives of people particularly, but not exclusively, living in Haiti and those of Haitian descent residing in the UK through the advancement of education and training and the promotion of good health. The commission says it has found a number of irregularities in the charity’s accounts, including a discrepancy in excess of £200,000 between what was declared in the charity’s annual returns for the last five years, and the bank transactions carried out during the same period. (The commission had obtained bank statements under section 52 of the Charities Act 2011).

Business rates

Charity Tax Group reports the Welsh Government has confirmed that it plans to consult on removing charitable rate relief for private schools/hospitals.

Tax and VAT

HMRC has updated its guidance on Social Investment Tax Relief to include guidance on new funding and employee limits, disqualifying arrangements and activities and rules on what the investment can be used for.

HMRC has updated its guidance on Venture Capital Schemes to include information about restrictions on tax relief for certain investments made through the Social Investment Tax Relief scheme.

BEIS has updated its guidance for bodies seeking accreditation under the Community Investment Tax Relief Scheme (CDFIs).



An email has been sent by the Office for Civil Society to subscribers to help charities prepare for the UK’s departure from the EU, including the possibility of leaving without a deal. The email includes summaries of some of the latest information on: data protection in a no-deal scenario; the settled status scheme; EU Funding and Erasmus+ and European Solidarity Corps.


The NHS Health Research Authority has highlighted the latest guidance on the implications of a no-deal Brexit for Health and Social Care research organisations.

Research collaborations

The government has published regulations to ensure the UK can continue to participate in the European Research Infrastructure Consortium (ERIC). (European research infrastructure consortia are bodies set up to support major international science and research collaboration within the European Union, and they provide a legal structure enabling countries and organisations to work together to tackle international research challenges.) Any country can be a member of an ERIC, and as the consortia are not funded through an EU budget, there is no requirement to contribute to an EU budget to receive funding into an ERIC structure (see here for more information).

Data protection

ICO fines

The Information Commissioner’s Office (ICO) has issued fines to an EU referendum campaign and an insurance company which were closely linked and had ineffective systems for segregating the personal data of insurance customers’ from that of political subscribers’. Leave.EU used Eldon Insurance customers’ details unlawfully to send almost 300,000 political marketing messages. Leave.EU has been fined £15,000 for this breach. Eldon Insurance carried out two unlawful direct marketing campaigns. The campaigns involved the sending of over one million emails to Leave.EU subscribers without sufficient consent. Leave.EU has been fined £45,000 and Eldon Insurance has been fined £60,000 for the breach. The ICO is also going to carry out an audit at both organisations.



A new system alerting charities to when they have been left money in wills is to be established by HM Courts and Tribunals Service following a decision to end its current arrangement with Smee and Ford. Representatives of the Association of Chief Executives of Voluntary Organisations, the National Council of Voluntary Organisations, the Institute of Fundraising and the Institute of Legacy Management have been invited to join a working group bringing together views of the sector with the aim of creating a replacement arrangement.

The Non-Contentious Probate Fees Order 2018, which would impose a significant increase in probate fees, is due to be debated by the House of Commons Delegated Legislation Committee on 7 February.


In response to a written parliamentary question, DCMS has said it expects to publish its response to the consultation on society lotteries during the first half of 2019.



To mark Children’s Mental Health Week (4-10 February), the Education Secretary Damian Hinds has announced that up to 370 schools in England will take part in a series of trials testing different approaches to supporting young people’s mental health.

The Education Secretary hosted a roundtable last week to encourage more faith schools to consider academy conversion.

Higher education

The Equality and Human Rights Commission has collaborated with leading organisations from across the sector to develop new guidance on freedom of expression to be used by all higher education institutions and students’ unions. The guidance has been produced with input from the National Union of Students, Universities UK, Charity Commission for England and Wales, Office for Students, Independent HE, Guild HE, Commission for Countering Extremism and Home Office.

The government has announced measures to improve outcomes for ethnic minority students in higher education.

Health and social care

See under Brexit above.

The Department of Health and Social Care has published a local authority circular (LAC (DHSC)(2019)1) on charging for adult social care and support.

Social finance

See under Tax and VAT above.

Social Investment Business has released a new report, What a Relief, produced by Social Spider CIC. The report sets out current use of SITR and notes that uptake has fallen substantively short of the original projections for the scheme.

Third Sector reports that the National Lottery Heritage Fund will offer loans (as well as grants) for the first time, over the next 5 years. An NLHF spokesperson states that the intention is to encourage organisations working in heritage to diversify their income, as well as the NLHF recycling funds, increasing its impact and attracting funds from public and private sector partners, including those that otherwise do not invest in heritage projects.

Faith based organisations

See above under Education, Schools.

Local authorities

The Committee on Standards in Public Life has published a report on local government ethical standards. Key findings include a number of concerns around the conduct of councillors and some parish councils; risks surrounding the current rules on conflicts of interest, gifts, and hospitality; and strains on local authority governance as a result of the increased complexity of local government decision-making.


See above under Data Protection, ICO fines and Education, Higher education.


The Office of the Scottish Charity Regulator (OSCR) has published its inquiry report into Tayside NHS Board Endowment Funds. The inquiry was opened following press reports that the charity had paid grants retrospectively to Tayside Health Board (the corporate trustee of the charity) for projects which the health board had already paid for. The inquiry concluded that there was mismanagement and misconduct in the administration of the charity, due to the failure of the charity trustee to act with the care and diligence that is reasonable to expect of a person who is managing the affairs of another person and to identify and deal appropriately with the conflict of interest between it and Tayside Health Board. The inquiry report comments that the governance structure of the charity makes it difficult for a separation of interests to be appropriately managed and makes a failure to act in the interests of the charity more likely. OSCR has made recommendations to the charity for its future governance and is to engaging with the Scottish Government as to the governance structures of NHS endowments charities in general, which would require legislative change.

OSCR has posted a video on its website about the changes proposed by the Scottish charity law consultation.

OSCR has issued a reminder to charities with a financial year end of 31 March that their annual accounting filings were due on 31 January.

A new charity appeal has been filed in relation to Dr Sloan’s Trust – no details available.



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 February 6, 2019.