For many of us with school-age children, they will be starting to break up for the holidays and will be excited for the summer ahead, especially with this gorgeous sunshine (long may it continue!). Some of us with holidays abroad being cancelled due to the increasing Covid-19 cases in the UK, throughout Europe and beyond, will now be looking forward to enjoying the summer at home or somewhere in the UK. For others, this was always the plan. As a team, we have recently been discussing the wonderful beaches, parks and attractions that are on offer in the UK. It has been fantastic to be reminded what a wonderful country we live in and how lucky we are to never be too far away from beautiful beaches and countryside – even if you live in Birmingham as many of us do! Whether you are staying home or going on holiday over the next month or two, we wish you a lovely summer break.

Before you put on your out of office, however, we have another charities newsletter for you. In our July edition, we cover: charities struggling with their annual filing requirements due to the pandemic can still contact the Charity Commission and Companies House for an extension to their filing deadlines; a possible change to the frequency in which business rates are reviewed which could mean a fairer system that takes into account the economy; new guidance from the Finance Regulator for fundraisers; current case law about a community benefit society; and much more!

Formal regulatory alert for international aid charities – safeguarding
Following the analysis of recent serious incident reports submitted to the Charity Commission, areas of risk and weakness have been identified around the issue of safeguarding within international aid charities. Although improvements have been made, incidents like those that came to light in the Democratic Republic of Congo have highlighted that more work needs to be done to prevent sexual abuse and exploitation.

Although not limited to organisations working abroad, the Commission has issued a formal regulatory alert to over 5,000 international charities with recommended good practice that can be applied to all charities working with children and vulnerable people:

  1. Thorough and timely investigations into allegations and incidents and self-reporting to the Commission where necessary.
  2. Joining the Misconduct Disclosure Scheme to help protect against individuals who pose a risk.
  3. Giving victims and survivors, and their families and friends, a safe means to report concerns and complaints by providing clear organisational policies.
  4. Designing reporting mechanisms that are sensitive to the local context and accessible to all regardless of language, gender, religion and socioeconomic status and using local organisations where appropriate.
  5. Developing a survivor-centred approach to safeguarding that reflects the range of potential harms faced and considers possible victim and survivor support services from programme/project conception.
  6. Clearly communicating what support is available to victims and survivors and how it is accessed.

“Effective safeguarding is never complete”, and every trustee should have a clear understanding of safeguarding within their organisation which should be continually monitored which in turn helps to identify gaps.

If you’d like advice on serious incidents or safeguarding issues within your charity, please get in touch with Edwina Turner who works closely with our regulatory team on safeguarding concerns.

Covid volunteer guidance update
The Government has continued to update its guidance for charities as the pandemic continues. The latest update includes a new section on contact tracing recording and a warning regarding the new Covid-19 Delta variant. Voluntary organisations should keep a record of customers, visitors, staff and volunteers for at least 21 days for NHS Test and Trace purposes. This should include information like shift times for volunteers and contact details.

Charities are also reminded to check local advice regarding covid restrictions with the increased infections due to the Delta variant.

Annual return preparation
From 1 July 2021 to 30 September 2021, if you have an imminent filing date for your annual return and you are unable to meet your filing obligation for a Covid-19 related reason, you can still apply for a new filing extension from the Commission.

In the annual return charities with an income of above £10,000 are required to submit answers about the charity such as income and spending, income or contracts from central government or local authorities, trustee payments and staff salary bands and benefits.

For charities with an income above £25,000, serious incident reports must be disclosed to the regulator before an annual return is submitted alongside an annual trustee report, accounts and an independent examiner’s report. For the full Commission guidance, please see here.

Government consultation on business rates
The Government is currently considering more frequent revaluations of business rates, proposing reviews every three years instead of five. The proposal aims to make the system fairer and for valuations to reflect the economy’s performance. The consultation closes on 24 August 2021 with the outcome expected in the autumn. The potential change could mean savings for charitable organisations that already receive the 80% relief from non-domestic rates.   

Revised Charity Commission coronavirus (Covid-19) guidance for the charity sector
The Charity Commission updated its coronavirus guidance for charities on 2 July.

Trustees are reminded that they must check their charity’s governing document to ascertain whether it allows them to hold meetings online or by telephone. If it does not, trustees must consider whether they have no other choice but to cancel or postpone AGMs and other critical meetings and follow the provisions of their governing document. If there are no such rules, the Commission says that it will understand if trustees still postpone meetings if it is in the best interests of the charity. This decision should be recorded to demonstrate good governance.

Many charities are using this time to review their governing documents to make sure it is ‘future proof’ and allows for online meetings, electronic voting and written resolutions. If you would like to update your charity’s governing document, please get in touch with your ACS charity contact or Edwina Turner.  

Case law – one legal person or two – conversion to a community benefit society
The case of Mount Wellington Mine Ltd v Renewable Energy Co-operative Ltd challenged a previous arbitrator’s decision in a dispute arising from a lease. The defendant, Renewable Energy Co-operative Ltd had been a company limited by guarantee and converted into a community benefit society (CBS) under the Co-operative and Community Benefit Societies Act 2014. When the conversion took place, it was one legal body that converted from one legal scheme to another. Therefore, the company’s assets, liabilities and obligations remained with the legal body throughout and did not require separate transfer or assignment as if it were two separate legal bodies.

If you would like advice on matters relating to community benefit societies (CBSs), please get in touch with David Alcock.

Four key fundraising values
The Fundraising Regulator, five years from its inception has published new guidance for fundraisers and the public on the four key values of the code’s standards: legal, open, honest and respectful.

For the full guide, see the Fundraising Regulator’s website.

For more information

If you would like more details about anything in this newsletter please speak to your usual ACS contact or contact Katie Crosbie.

Katie Crosbie is an executive in the charities team, specialising in charity governance. Katie leads on most of the charity registrations in the team. She also works with charities that are changing their structure from unincorporated to corporate or are converting from charitable companies to CIOs.