Bates Wells Briefing for Charities & Social Enterprises | 9 March

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

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Charity
Sectors
Charities, Social Enterprise
Type
Updates

Bates Wells Highlights

In this Briefing, Leticia Jennings, partner, reviews a recent dispute regarding misnamed charities in an ambiguous will. What are the lessons learned and what should you do if your charity is contacted?
 
How is the new post-Brexit UK subsidy control regime taking shape?  See here for a summary from Bates Wells’ senior associate Lindsay Draffan.


At a glance

The ICO has issued a reminder there’s six months left to run of the transition period to comply with the ICO Age Appropriate Design Code.

The Fundraising Regulator has published two new investigations into charity fundraising practices.

The Financial Conduct Authority has published final guidance on proving the presence of COVID-19 in business interruption insurance claims. 

The government has published a “Protect Duty Consultation: Making the public safer at publicly accessible locations”.  


Coronavirus – budget announcements

The budget announcements included:

  • An extension of the Coronavirus Job Support Scheme to September 2021 across the UK.
  • An extension of the UK-wide Self Employment Income Support scheme to September 2021, with 600,000 more people who filed a tax return in 2019-20 now able to claim for the first time.
  • £5 billion for new Restart Grants – a one off cash grant of up to £18,000 for hospitality, accommodation, leisure, personal care and gym businesses in England.
  • A new UK-wide Recovery Loan Scheme to make available loans between £25,001 and £10 million, and asset and invoice finance between £1,000 and £10 million. Once received, the finance can be used for “any legitimate business purpose, including growth and investment”.  The government guarantees 80% of the finance to the lender to ensure they continue to have the confidence to lend to businesses.  The scheme launches on 6 April and is open until 31 December, subject to review. Loans will be available through a network of accredited lenders, whose names will be made public in due course.
  • An additional £300 million to support theatres, museums and other cultural organisations in England through the Culture Recovery Fund.
  • Extension to the VAT cut to 5% for hospitality, accommodation and attractions across the UK until the end of September, followed by a 12.5% rate for a further six months until 31 March 2022.
  • 750,000 eligible businesses in the retail, hospitality and leisure sectors in England to benefit from extensions to business rates relief.

Coronavirus – government grants

The Department for Business, Energy & Industrial Strategy has updated its “Local Restrictions Support Grants (LRSG), Additional Restrictions Grant (ARG), Christmas Support Payment (CSP) for wet-led pubs: guidance for local authorities”, increasing the cap for grants under the Small Amounts of Financial Assistance Allowance, the COVID-19 Business Grant Allowance and the COVID-19 Business Grant Special Allowance to £10,935,00. Bates Wells associate Suhan Rajkumar comments “Charity retailers had, until now, been unable to benefit from the full government grants available across their retail networks due to much lower caps of around £3 million. This increased cap will make a significant difference to charities with national trading arms which continue to suffer from the ongoing restrictions.”

The Sports Minister has announced the latest tranche of funding from the Government’s Sport Winter Survival Package, which will see more than £40 million provided to support grassroots rugby union clubs and up to £5.5 million to support the launch of the men’s Championship competition.


Coronavirus – impact on the sector

NCVO is continuing to conduct the largest UK study exploring the impact of Covid-19 on the Voluntary, Community and Social Enterprise sector. The latest round to the survey is now open until 22 March.  You can take the survey here.


Coronavirus – insurance

The Financial Conduct Authority has published final guidance on proving the presence of COVID-19 in business interruption insurance claims. The guidance is intended for policyholders, insurers (including managing agents at Lloyd’s) and insurance intermediaries.


Brexit

Status of UK companies with their principal place of business in an EU state

The European Commission has published updated guidance on the withdrawal of the UK from the EU and company law.  Subjects covered include the recognition of the legal personality of UK-incorporated companies with central administration or principal place of business in an EU Member State, EU company law (eg in relation to incorporation, capital maintenance and alteration) no longer applying to UK companies, cross-border mergers, shareholder rights, takeover bids, business registers interconnection systems and European company forms.

Also see under Subsidy control below.


Budget

As well as the coronavirus measures mentioned above, budget headlines for charities and social enterprises included:

  • £19 million funding to tackle domestic abuse in England and Wales, with funding for a network of ‘Respite Rooms’ to support homeless women and a programme to prevent reoffending, and £10 million to support veterans with mental health needs across the UK.
  • Armed Forces charities to receive up to £475,000 in 2021-22 to support the development of a digital and data strategy for the sector.
  • £700 million for the UK’s arts, culture and sporting institutions.
  • Social Investment Tax Relief (SITR) scheme will be extended to April 2023.  For more, see under Social Finance below.

In addition, on Budget Day the government published prospectuses for three new funds: the UK Community Renewal Fund, Levelling Up Fund and Community Ownership Fund.  These prospectuses can now be found here.

  • The £220m UK Community Renewal Fund aims to support people and communities most in need across the UK to pilot programmes and new approaches and will invest in skills, community and place, local business, and supporting people into employment.  The fund will operate from 2021 – 2022 only and invite a range of applicants to bid including but not limited to universities, voluntary, community and social enterprise organisations and umbrella business groups.
  • The Levelling Up Fund will be extended to the whole of the UK to help boost growth in Scotland, Wales and Northern Ireland. The Chancellor announced £4.8 billion will now be invested in local projects, such as regeneration and transport. It will run from 2021/22 to 2024/25. 
  • The £150 million Community Ownership Fund will “help ensure that communities across the UK can continue to benefit from the local facilities and amenities that are most important to them”. From the summer, community groups will be able to bid for up to £250,000 matched funding to help them to buy local assets to run as community-owned businesses. In exceptional cases up to £1 million of matched funding will be available to help establish a community-owned sports club or buy a sports ground at risk of loss from the community. Co-operatives UK’s comments can be found here.

Civil Society Media reports charity leaders have described the Budget as disappointing and suggested the government does not recognise the value of the sector.


Charity Commission

Interim Manager (IM) appointments

The Charity Commission has announced an interim manager:

  • has been appointed to conduct a review of The Kingdom Church GB and its relationship with two subsidiary companies. The charity is currently subject to a statutory inquiry looking into the trustees’ compliance with their legal duties and management of the charity’s resources and financial affairs. Following the initial review, the commission says that the IM will consider the charity’s future operation and viability. 
  • has been appointed to the educational charity, Rabia Educational Trust, which operates the Rabia Girls and Boys School in Luton. The commission opened a second statutory inquiry into the charity to examine concerns about its administration and governance, including the trustees’ failure to meet the Independent Schools Standards. The IM will assess the future viability of the charity to the exclusion of its trustees. The trustees of the charity continue to have all the powers and duties of trustees, with the exception of this specific function. Depending on the outcome of this initial assessment, the interim manager’s role may vary, for example, to improve the charity’s operation or to take steps to wind up the charity.

Inquiry report

The commission has published an Inquiry report into the Central Gurdwara (British Isles) London Khalsa Jatha.  The inquiry found that determining the charity’s membership to facilitate an election of new trustees would help to resolve the regulatory issues faced by the charity and to bring it back onto a proper footing. However, some of the former trustees appeared to be unwilling or unable to determine the membership themselves. Therefore, an Interim Manager (“IM”) was appointed with a limited scope to determine the membership of the charity.


Tax and VAT

Making Tax Digital for Corporation Tax

The Charity Tax Group has submitted a detailed response to the HMRC consultation on the design of Making Tax Digital for Corporation Tax.  In summary, CTG says it has “serious concerns that a large number of charities could be required to comply with these reporting requirements. This would result in significant additional costs and administration, with limited benefits, given that most charities currently pay no Corporation Tax and have limited compliance requirements.”  CTG is therefore requesting a general exemption for charities and highlighting steps to mitigate the impacts on charities if they are required to comply.

Tax reform

Charity Finance Group has provided an update on the Treasury committee’s latest report on “Tax after coronavirus” which warns that ‘tax reform is needed to address unsustainable public finances’.


Sector General

The government has published a “Protect Duty Consultation: Making the public safer at publicly accessible locations”.  The consultation closes on 2 July 2021.


Data protection

ICO Age Appropriate Design (‘Children’s’) Code – 6 months till end of transition period

The Children’s Code came into force on 2 September 2020 with a 12-month transition period, meaning that organisations have just 6 months left to ensure that they comply. The Code imposes 15 standards that organisations must consider when offering online services to children. Children’s data is granted special protection under the GDPR and the ICO will be able to open investigations against those who are found to be in breach of the Code. The ICO has already indicated that the protection of children’s data is a regulatory priority, so its reminder will serve as a final prompt for organisations to get their houses in order.

ICO fines

An online food delivery company, Muscle Foods has been fined £50,000 by the ICO for sending almost 150 million marketing communications without consent.  Muscle Foods had sent out the emails and texts between March 2019 – October 2019. Their actions were a contravention of the Privacy and Electronic Communications Regulation 2003 (PECR). Under PECR the ICO’s enforcement powers are still governed by the old data protection regime, under which the ICO is subject to more limited fining powers.   


Fundraising

Fundraising Regulator

If you missed the Fundraising Regulator’s Annual Event on 8 February 2021, you can now access a recording of it here

Re the proposed changes to Coronavirus restrictions across the UK, the FR says it is “currently in dialogue with colleagues inside Government about how we might update our existing guidance to reflect this and clarifying the future implications for fundraising.”  Also see this recent blog by Head of Policy, Charlotte Unwin. 

The FR has published two new investigations into charity fundraising practices:


Legacies

In this Briefing, Leticia Jennings, partner, reviews a recent dispute regarding misnamed charities in an ambiguous will. What are the lessons learned and what should you do if your charity is contacted?


Education

Ofqual has published draft guidance for heads of centre, heads of department and teachers on how to generate the evidence that will be used to determine their students’ grades this summer. The press release can be found here.

The School Discipline (Pupil Exclusions and Reviews) (England) (Coronavirus) (Amendment) Regulations 2021 have been laid before Parliament and will come into force on 25 March 2021. The regulations make changes to the pupil exclusion regime to take account of the implications of COVID-19 by amending the definition of “relevant” exclusions in the School Discipline (Pupil Exclusions and Reviews) (England) Regulations 2012 (SI 2012/1033) and extending the date by which an exclusion must have taken place, to be considered a relevant exclusion, from 25 March 2021 to 25 September 2021.

The Department for Education has published the March 2021 school governance update which includes information on, for example, coronavirus guidance pages for schools and colleges, updated school land guidance and forms and an updated on School Financial Value Standards.

Also see under Health below.


Health

The Department of Health and Social Care has:

  • announced £79 million to boost mental health support for children and young people.   This will include mental health support teams in schools and increased access to community mental health services.
  • announced £100 million specialised support to help those living with obesity to lose weight

To mark this week’s International Women’s Day, the government is launching a 12-week call for evidence to better understand women’s experiences of the health and care system.

Armed forces veterans suffering a mental health crisis are to receive specialist care as part of a new NHS Op Courage service.  NHS staff will work with military charities to provide therapy, rehab services and, in extreme cases, inpatient care.

The House of Commons Health and Social Care Committee has announced the launch of an inquiry into the government’s proposals to reform the current health and social care system as set out in its White Paper, Integration and Innovation: working together to improve health and social care for all. The first evidence session focused on integrated care systems, reform of social care and the extension of the powers of the Secretary of State for Health and Social Care. Two further evidence sessions are planned.


Social finance and social impact investing news

Policy Paper: Extension of the Social Investment Tax Relief (SITR) for Venture Capital Schemes. The extension of SITR was announced in the Chancellor’s Budget on 3 March 2021. The government’s policy paper provides further information on the extension. Social Enterprise UK’s statement on the extension can be found here and Pioneers Posts’ comments can be read here.

Charities demand more progress on responsible investment from asset managers. Civil Society Media reports on charities responding to a survey of asset managers prepared for the Charities Responsible Investment Network, which showed that the majority of managers had no investment targets related to climate change, and on an EIRIS Foundation report finding that “more needs to be done” by charities and their asset managers to improve responsible investment policies.


Social enterprise sector news

Government will work with social enterprises on Covid-19 recovery, minister says. Civil Society Media reports on civil society minister Baroness Barran’s responses to the Social Investment Commission on the role of mid-sized social enterprises in delivering work in areas like healthcare and job training, and made comment on the dormant assets scheme.


Sport

See above under Coronavirus – government funding and Budget.


Armed Forces charities

See under Health above.


Public procurement

The Welsh Government has published a consultation on a draft Social Partnership and Public Procurement (Wales) Bill which is intended to improve the delivery of public services and social and economic well-being in Wales.


Subsidy control

How is the new post-Brexit UK subsidy control regime taking shape?  See here for a summary from Bates Wells’ Senior Associate Lindsay Draffan.


Pension Schemes Act 2021

A parliamentary statement has been published setting out the government’s planned timetable for bringing the Pension Scheme Act’s provisions into force, and for consulting on draft regulations that are due to be made under the Act.  The government intends to consult on regulations concerning the Pensions Regulator’s powers this spring, and intends to commence these powers – and the criminal offences measures – in the autumn.”  Other draft regulations will be consulted on from summer onwards.


Scotland

OSCR has published updated guidance for charities campaigning on political issues. Under Scottish charity law, charities can campaign if:

  • it is advancing your charitable purposes
  • your governing document does not prevent the activity
  • you are not advancing a political party and,
  • you can show you are acting in the charity’s best interests.

When considering whether you are acting in a charity’s best interests, this should include the reputational implications of your actions. While there are restrictions on what campaigning activities a charity can undertake, it is important to note that political campaigning in principle is not forbidden. In fact, political campaigning on particular issues can be an important way for charities to achieve their charitable purposes.

OSCR is publicising that Disclosure Scotland is launching a new digital channel to apply for Protecting Vulnerable Groups (PVG) level disclosures.


Northern Ireland

CCNI has said that research it has carried out shows that public trust and confidence in charities is higher in Northern Ireland than in Great Britain and the Republic of Ireland.


You are invited….

Join our Resolving trade mark and branding disputes for charities online event on 18 March, 4:00-6:00pm.

Resolving brand name disputes is rarely easy.  This webinar will help you understand how best to tackle these kinds of problems – without incurring the expense and potential PR consequences of formal legal action.


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 March 8, 2021.