Bates Wells Briefing for Charities & Social Enterprises | 22 September

Bates Wells highlights

Charities, Social Enterprise

Unfortunately,  we have had to take the difficult decision to cancel our 2020 Charity Tea Party. Despite our best efforts to bring you something of value we had to face the reality that a remote Tea Party would not deliver what we know clients enjoy about this event: being able to meet up with fellow charity professionals and discuss the big issues affecting our sector (over a cup of tea and a slice of cake).  But do not fear: the Tea Party will be back in 2021 – bigger and better than ever before!

Our Briefing is taking a break next week – we will cover the next fortnight’s news in our Briefing on 6th October.

At a glance

Big Society Capital and eight others have called on the government to extend the Coronavirus Business Interruption Loan Scheme until 4 November, in order to support struggling charities and social enterprises.

The Information Commissioner’s Office has published data protection guidance for organisations mandated to collect customer information for the test and trace programme. 

The Scottish government is extending the “relevant period” during which Scottish charitable incorporated organisations can hold virtual members’ meetings. 

HMRC has updated its guidance on the VAT treatment of early termination fees and compensation payments.

Coronavirus – government funding

Last week the Minister for Rough Sleeping and Housing Kelly Tolhurst MP announced a further 25 charities will receive a share of the £1m boost as part of the government’s £10m emergency fund to support domestic abuse victims and their families during the pandemic.

Big Society Capital and eight other social investors have called on the government to extend the Coronavirus Business Interruption Loan Scheme (CBILS) up to 4 November in order to support struggling charities and social enterprises. Big Society Capital notes that many charities and social enterprises have delayed their applications as they apply to grant programmes first and do not have the capacity to make more than one application at once, and may therefore miss out on CBILS.

New Philanthropy Capital (NPC) has published this blog “How much government funding has the charity sector really received?”  

Coronavirus – other funding

Civil Society Media reports the Garfield Weston Foundation has announced a £25m fund to help cultural organisations recover from the Covid-19 pandemic. It will offer grants of between £100,000 and £2m to visual arts organisations, arts centres, museums and galleries with a minimum annual income of £500,000.

Coronavirus – rule of six

Civil Society Media reports the Fundraising Regulator and the Chartered Institute of Fundraising (IoF) are working with the government on specific guidance for fundraising events, which according to the IoF could be published this week.

Coronavirus – financial support for self-isolation

The government has announced a new package to support and enforce self-isolation with payments of £500 for those on lower incomes who cannot work from home and have lost income as a result.

New fines for those breaching self-isolation rules will start at £1,000, bringing this in line with the penalty for breaking quarantine after international travel. The new fines for those breaching self-isolation rules could increase to up to £10,000 for repeat offences and for the most egregious breaches, including for those preventing others from self-isolating. For example, this could include business owners who threaten self-isolating staff with redundancy if they do not come to work.

Coronavirus – test and trace

Since 18 September, the UK Government has made it mandatory for all businesses in the hospitality sector, leisure and tourism sector and close contact businesses, such as barbers and beauticians, in England to collect customer information for the test and trace programme.

The Information Commissioner’s Office (ICO) has published accompanying data protection guidance for organisations mandated to collect this information.  

Coronavirus – business interruption insurance

Last week the High Court handed down its ruling in a test case seeking legal clarity on the meaning and effect of certain business interruption policy wordings in the light of the pandemic. In its summary of the judgment the Financial Conduct Authority says that the 150 page judgment found in favour of most of the policyholders’ arguments and removes several roadblocks to successful claims.  If there’s an appeal, the parties have agreed that they’ll seek to have it heard on an expedited basis.  

Corporate Insolvency and Governance Act 2020

There is no news yet whether the “Relevant Period” under the Act will be extended in England.  See under Scotland below for an extension being made in Scotland until 30 December in relation to SCIOs and members’ meetings.

Tax and VAT

HMRC update on the VAT treatment of early termination fees and compensation payments

In the past, HMRC guidance said that when customers were charged to withdraw early from agreements to receive taxable supplies of goods/services, those charges were not themselves charges for a taxable supply, and so were outside the scope of VAT.

However, in light of recent Court of Justice of the European Union (CJEU) case law, HMRC has updated its guidance in this area. It has now confirmed that any early termination fees or compensation charged on the customer (under a contract for the supply of goods/services) will be treated as payments which are for the supply of goods/services contracted for. The fees will therefore be within the scope of VAT.

This updated guidance will be relevant to any suppliers who charge their customers to withdraw from contracts to supply goods/services. Those charges will now be within the scope of VAT.

Data protection

Health data

See here for an article by Bates Wells’ Head of Privacy, Victoria Hordern, about the breadth and complexities of health data.


The Department for Education has:

  • updated its guidance ‘Free schools: pre-opening guide’. The guide sets out the legal requirements that new school proposer groups are required to follow when opening a new free school and has been updated to reflect changes due to COVID-19. Changes include that virtual meetings should replace face-to-face meetings and that virtual Ofsted inspections may take place; and
  • announced that 99.9% of schools have reopened for some or all of their students and 92% of schools have reopened for all of their students. 88% of pupils are back in school.

The Education (Information About Individual Pupils) (England) (Amendment) Regulations 2020 (SI 2020/965) have been laid before Parliament and will come into force on 1 October 2020. These Regulations expand the range of information that maintained schools are required to provide to the Secretary of State, to include the number of all attendances and non-attendances recorded in the school’s attendance register.

Social finance and social impact news

Andrew Thompson of Pioneers Post reports on how blockchain technology can be used to empower social entrepreneurs, especially those such as female social entrepreneurs in Pakistan where a project is underway to allow qualification certificates to be available via blockchain. College or university certificates can only be collected from one central location in Pakistan, meaning people have to travel for up to three days to collection them whilst many women in the region are encouraged to stay at home and do not possess identification to collect certificates.

The European Venture Philanthropy Association (EVPA) reports that C&A, the European fashion chain, has launched the Laudes Foundation “to address the dual crises of climate breakdown and inequality that, the foundation says, endanger nature and jeopardise the safety and dignity of people in countless communities around the world.” The foundation aims to make both grants and repayable investments for around €50m-€55m a year.

Esela has announced a series of virtual events exploring the role of law in building sustainable economies that promote positive impact. Sessions will run on 30 September, 7 October and 14 October. For more details and to book a place, see here.  


The Climate Assembly UK has published its report on how the UK can achieve its statutory target for net zero carbon by 2050. The Climate Assembly is a citizens’ assembly called by six Select Committees of the House of Commons (Business Energy and Industrial Strategy; Environmental Audit; Housing, Communities and Local Government; Science and Technology; Transport; and Treasury) in June 2019. The Climate Assembly consists of 108 people from all walks of life.

Company law

A not for profit company, Animal Concern Ltd, has successfully obtained an order from the Company Names Tribunal that another company, Animal Concern (Scotland) Ltd must change its name.

BEIS has published the government’s response to its consultation on options to enhance the role of Companies House and increase the transparency of UK corporate entities. The government proposes to, among other things:

  • introduce compulsory identity verification for all directors and PSCs, and all individuals who file information on behalf of a company;
  • only permit supervised agents to file information on behalf of a company, and require them to provide evidence of the verification they have undertaken;
  • increase the Registrar’s powers, to allow them to query information submitted to Companies House and to remove information from the register in certain circumstances; and
  • give Companies House power to query, and possibly reject, company names before they are registered.

The government intends to publish a comprehensive set of proposals that will set out in detail how it thinks the reforms should be implemented and bring forward the legislation to implement the proposals when Parliamentary time allows. At that time, it will consider communication and transitional arrangements for existing companies.

Companies House will aim to finalise the design and scope of an identity and access management system by the end of the 2020/2021 financial year.  

See here for the press release and here for the full government response to the consultation.


NCVO has published a reminder for charities about preparing for “Brexit uncertainty”.  



The “Relevant Period” during which organisations are afforded the flexibility to hold virtual meetings is due to be extended for Scottish charitable incorporated organisations until 30 December 2020. The Scottish government is extending the period using its powers under the Corporate Insolvency and Governance Act 2020.

The Office of the Scottish Charity Regulator (OSCR) is advising Scottish charities to be ready for the end of the furlough scheme.

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 September 22, 2020.