Bates Wells Briefing for Charities & Social Enterprises | 19 November

Bates Wells highlights

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At a glance

The Charity Commission has pursued its first contempt of court case in the High Court against two former trustees. 

NCVO has published its manifesto for the next government.

The Department for Education has published non-statutory “Character education: Framework guidance”.

The Institute for Fiscal Studies has published “English local government funding: trends and challenges in 2019 and beyond”.

Charity Commission

CIO names

The commission’s guidance on converting a charitable company to a CIO has been amended to include the requirement that you need prior written approval from Companies House to use a sensitive word in your CIO name before the commission can authorise a conversion. Note that the requirement to obtain approval from Companies House applies even if the company you are converting to a CIO already has that word in its name, and Companies House had already approved the use of that word when the company was formed, or subsequently changed its name.

Contempt of court finding

For the first time, the commission has pursued a contempt of court case in the High Court, which has found against two former trustees of the Darren Wright Foundation, a charity currently under statutory inquiry. The High Court found that the two individuals failed to comply with an order to supply evidence and documentation to the regulator. Another hearing is expected to determine the penalty against the two defendants.

New inquiry

The commission has announced that it has opened a statutory inquiry into Hospice Aid UK (1092575). The charity was subject to a previous inquiry in 2014, when the commission issued the trustees with an action plan, which required them to carry out certain actions in order to improve the charity’s governance, to place it in a better financial position, and ensure its agreement with direct marketing agency, Euro DM, was transparent to the public. A recent review of the charity’s 2018 accounts has raised concerns which resulted in the opening of this new inquiry.

Inquiry Reports

Name of organisation

Christ Embassy (1059247)

Inquiry Report

CC press release

Brief description

The charity operates over 90 churches was put into statutory inquiry following a number of concerns about the use of charitable funds on large connected party payments.

An interim manager (IM) was appointed during the inquiry.

Anything unusual e.g. unusual facts or novel/rare use of Commission’s powers

The inquiry found that the charity trustees had breached a number of their duties, including failing to register the charity’s properties correctly with the Land Registry, failing to obtain adequate insurance and failure to obtain the necessary planning permission in order to use one of the charity’s properties as a place of worship.

The IM informed the Inquiry that in excess of £1.4m of expenditure was disallowed by HMRC and became subject to tax. The IM came to a settlement with HMRC.

The Inquiry removed two of the trustees of the charity; however, they resigned prior to the Commission being able to complete the process. (This loophole was closed by The Charities (Protection and Social Investment) Act 2016).

A new board of trustees are now responsible for the administration and management of the charity going forward.

Social media use

The commission has published information about how it uses social media.

Elections and campaigning

NCVO has:

The National Children’s Bureau has published a Manifesto for a Better Childhood, developed with children and young people. It sets out a positive vision for improving young lives, starting in pregnancy and continuing until a young person’s 25th birthday.

Data protection

The Guardian reports the Information Commissioner’s Office has criticised the Department for Education for sharing pupil data with the Home Office. 

The Information Commissioner’s Office has published a new blog “Why special category personal data needs to be handled even more carefully”. 

The Information Commissioner has opened a consultation on her office being granted access to investigation and other associated powers under the Proceeds of Crime Act 2002.The consultation closes on 6 December 2019.


Self regulation of fundraising

Fundraising self-regulation: An Analysis and Review” is a new report, commissioned by the European Center for Not-for-Profit Law to the Philanthropy Center.  It is written by Ian MacQuillin, Dr Adrian Sargeant and Harriet Day.


The Department for Education has published non-statutory Character education: Framework guidanceThe guidance provides six “character benchmarks” for schools to address in order to consider their effective provision for character education, which include consideration of how well a school’s curriculum and teaching develops resilience and confidence and how the value of volunteering and service to others is promoted.

Social finance

The investee who changed me: “Grameen Shakti was a total eye-opener”. Saskia Bruysten, co-founder and CEO at Yunus Social Business, writes for Pioneers Post about asking investees how they make their offering affordable to those with the least means, when a solution involves a sizeable payment from those it should benefit.

Communities/local authorities

The Institute for Fiscal Studies has published a report “English local government funding: trends andchallenges in 2019 and beyond”. Charity Tax Group summarises some key points from the report here

Winding up and insolvency

Insolvency – first compensation order made against disqualified director

The first compensation order has been made under the Company Directors Disqualification Act 1986 since the compensation regime was introduced in 2015.  The disqualified director, who had misappropriated over £500,000, was ordered to pay compensation of the same amount – most of it to 28 identified customers, with just over £100,000 going pro rata to the general body of creditors.

Re Noble Vintners Ltd; Secretary of State for Business, Energy and Industrial Strategy v Eagling [2019] EWHC 2806 (Ch)[2019] All ER (D) 21 (Nov)

Disclaimer – The information contained in this update is not intended to be a comprehensive update – it is our selection of the website announcements which we think will be of interest to charities and social enterprises. The content is necessarily of a general nature – specific advice should always be sought for specific situations.

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 November 19, 2019.