Briefing for Charities & Social Enterprises

Our weekly round-up of news and updates from across the sector.


At a glance

The government has published guidance on which businesses are eligible for the Closed Businesses Lockdown Payment.   
The Chartered Institute of Fundraising has published a “Wellbeing and fundraising” set of resources. 
HMRC is asking for the views of the charity sector on extending Making Tax Digital to Corporation Tax. 
A consultation has been launched to develop global financial reporting guidance for not-for-profit organisations. 
Esela – The legal network for social impact, will hold its 2021 Virtual Conference in March.   

Coronavirus – government funding

The government has published guidance on which businesses are eligible for the Closed Businesses Lockdown Payment (CBLP) (originally announced on 5th Jan).  The Scottish Government has also announced a “significant top-up to the grant support available for hospitality, retail and leisure businesses across Scotland closed by level 4 restrictions”.


UK Shared Prosperity Fund
Civil Society Media reports charities will have to wait until June 2021 for information about applying for the SPF with applications for the expected £1.5bn funding not opening until April 2022.  A speaker from DCMS told an online audience last week: “We are expecting a prospectus in the summer months on the fund itself, and that will provide more information as to how organisations can apply for funding and support some of the outcomes outlined as part of the UK SPF.”
Also see under Tax and VAT below. 

Charity Commission

Next Charity Commission chair

Baroness Stowell will be giving her final speech as Chair of the Charity Commission this Thursday in an online event for the Social Market Foundation, which will include a Q&A session.

NPC has published a letter to the Secretary of State for Digital, Culture, Media and Sport arguing that the priorities of the Charity Commission should include:

  • The Charity Commission’s trustee obligations should be re-written to focus on mission and the impact achieved for the beneficiaries the charity serves.
  • Grant-making trusts should be more transparent, publishing both their payout ratio and their reasoning behind it each year.
  • The Charity Commission’s data needs to be much better used and made available in a far timelier manner than at present. 
  • The Charity Commission should drop the requirement that charities must seek permission before paying their trustees.

NPC urges the next chair of the Commission to be someone who will pursue this agenda.

Tax and VAT

Based on HMRC comments at a recent seminar, we have been led to believe that HMRC will be operating a light touch approach where genuine errors are made by businesses trying to comply with new VAT and Brexit rules.  Bates Wells Associate Susan Shi explains “While commenting on the implications of Brexit for Charities, and in the particular context of complying with the changed VAT rules in light of Brexit, HMRC officials have commented that they will be taking a “reasonably pragmatic approach to genuine errors”. HMRC officials recognise that errors can occur even when businesses are taking careful and full steps to comply with the rules, as these areas of law are very difficult. HMRC have stated that they will take a “holistic” approach where errors have occurred, and will take into account any “exceptional pressures” which the business may have faced. This is good news for the sector, and suggests that HMRC will be operating a light touch approach where genuine errors are made by businesses who are trying to comply with the new VAT rules post-Brexit.
HMRC officials also strongly recommended that organisations should stay well informed about their tax affairs, and speak to a good customs agent where relevant. HMRC has also published various useful pieces of guidance on imports and exports, and is running live webinars to help VAT registered traders make the transition to the new rules.”
Charities and tax returns
Charity Tax Group reports HMRC is asking for the views of the charity sector on extending Making Tax Digital to Corporation Tax.  HMRC has organised an event for charities on 9 February 2021 – full details in this HMRC commentary. Current HMRC thinking is suggesting that most charities could need to submit tax returns to HMRC. 
Gift Aid and cancelled events/loan waivers
CTG reports HMRC has told it that from now on any “waivers” of refunds (including waivers of loans from supporters to charities) can count as donations on which Gift Aid can be claimed.  There will be conditions for this to apply and HMRC guidance is expected shortly.
Charity Tax Group is publishing a new monthly bulletin.  You can sign up for free here


William Shawcross has been appointed to review Prevent, the government’s strategy to safeguard vulnerable people from being drawn into terrorism.  The review will consider the strategy and delivery of the Prevent programme, and will make recommendations for the future. The terms of reference will be published shortly.

Data protection

ICO priorities in 2021

According to a blog published by Elizabeth Denham, the Information Commissioner, the prime focus of the ICO’s workload in 2021 will involve supporting organisations through the challenges posed to data protection compliance by COVID-19, ensuring that the rights of individuals to data privacy are respected and promoting data protection by default and design.  Support from the ICO for organisations will also include:Helping them to make any changes required for compliance with the Age Appropriate Design Code and comply with their data sharing obligations under the UK GDPRProviding guidance on ensuring personal data is used fairly and lawfully in political campaigning, deploying facial recognition technology, and codes of conduct and certification schemes.Other operational work will include the ICO continuing to examine data broking practices and the processing of personal data concerning the victims of sexual crimes.  This is all in Ms Denham’s final year of office.

Marking Data Protection Day in 2021

Marking Data Protection Day last week, our head of data privacy, Victoria Hordern, reminds us of our right to privacy and looks back over a year in data protection and how our increased reliance on technology and data has brought inevitable data protection issues.

Climate change

The government has confirmed that the Environment Bill 2019-21 will be carried over to the May 2021 Parliamentary session and is now likely to receive Royal Assent in the autumn. The Office for Environmental Protection (OEP) is now expected to be launched shortly after Royal Assent. The Department for Environment, Food and Rural Affairs’ (Defra’s) blog explains what Defra will do in the interim concerning issues such as the development of secondary legislation on environmental targets (including on air quality), waste reforms and biodiversity net gain.


See under Tax and VAT above
The Chartered Institute of Fundraising has published a “Wellbeing and fundraising” set of resources. 

Youth services

NPC has published the sixth in a series of learning and insight papers, published as part of the learning project for the Youth Investment Fund. 


Funding boost to get more young people into work

The Department for Education has announced that employers can now apply for a £1000 cash boost to help them take on new trainees. This is available until 31 July 2021 and is in addition to the apprentice scheme announced last year, which offers employers £2,000 for each new apprentice they hire aged under 25, and £1,500 for apprentice aged 25 and over.

CMA warns firms over price-fixing of supplies to disabled students

The Competition and Markets Authority (CMA) has sent advisory letters to a number of firms, reminding them of their obligations under competition law, after learning of allegations that some suppliers colluded over the price of key services and equipment. The Student Loans Company (SLC) released a statement welcoming the CMA’s action. The SLC is also finalising the design of a new procurement to centrally contract the supply of certain goods and services funded by Disabled Student Allowances (DSA), which aims to both improve the customer experience for students in receipt of DSA and, in introducing robust contractual arrangements, deliver greater value for money for the taxpayer.

Social finance

What good impact practice looks like and how it helps drive results in startups
Nicholas Andreou (Investment Manager at Big Society Capital (BSC)) shares a few examples of start-ups in BSC’s ventures portfolio which are leading the charge in how well impact is managed and how this helps drive results. He sets out that, if you are looking to optimise for impact, good impact management is key.
Let’s stop measuring impact
Kelly Bewers, former MD of Year Here and NED of social enterprises Routes and Supply Change, writes for Pioneers Post, arguing that focusing on the numbers in impact measurement is complicating matters, and that a greater focus on real outcomes could improve things: “perhaps what matters most is whether people who use… services feel that things have improved, even slightly, for them as an individual in the context of their complex and unique set of experiences.”
Creativity, Culture & Capital is a new impact investing initiative from an international collaboration, including Nesta, the British Council and GSG. The initiative aims to demonstrate the potential benefits of a global impact investment fund for the inclusive creative economy, and serve as a crucible for this effort. For more, Nesta announced its involvement upon the launch of the platform.
Boris Johnson is launching the Adaptation Action Coalition, a new international coalition to tackle the impacts of climate change.

International development

According to a Jan 2021 survey of Bond members, small and medium NGOs are being hit worse by the financial ramifications of Covid-19 and UK government cuts.
See under Accounting below.

Animal welfare

The RSPCA has announced it plans to stop private prosecutions for animal cruelty.  See this Guardian report which states that “in recent years, the RSPCA has come under pressure to hand over files to the Crown Prosecution Service (CPS) from MPs who feel it has been too eager to take people to court itself.”    

Company law

Coronavirus – Companies House temporary strike off policy

Companies House has announced that it has temporarily paused its voluntary and compulsory strike off processes for one month, until 21 February 2021. 

Company disclosures, records and registers

Companies House (CH) has announced that Companies House Direct (CHD) and WebCHeck services will close later in 2021 as opposed to the initial date of February 2021. CH are currently developing a dissolved company records index which will be publicly available.


A consultation has been launched to develop global financial reporting guidance for not-for-profit organisations.  The International Financial Reporting for Non-Profit Organisations (IFR4NPO) consultation is part of a five year initiative to develop guidance by the Chartered Institute of Public Finance and Accountancy (CIPFA) and Humentum, a global not-for-profit organisation working with humanitarian and development organisations. The closing date for feedback is 30 July 2021 for Part 1 of the consultation and 24 September 2021 for Part 2.

Charities and insurance

The Financial Conduct Authority (FCA) has published a business interruption insurance policy checker and general FAQs for policyholders following the Supreme Court’s judgment in the FCA’s business interruption insurance test case. 


OSCR has concluded an inquiry into Breaking Chains Global, Scottish charity number SC048087 following media reports and receipt of concerns about the running of the charity, particularly high profile fundraising events that resulted in a significant amount of money being collected by the charity.

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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 2, 2021.