Newsletter - October 2009
LawWorks for Community Groups
Welcome to the LawWorks for Community Groups newsletter featuring articles which may be of interest to lawyers advising charitable clients, particularly if charity law is not their usual field of work. We aim to keep you updated on key legal developments affecting the charitable sector, plus stories of broader interest to the Third Sector. We hope you find the newsletter useful and interesting – please let us know if you have any feedback or suggestions.
Best wishes,
Ruth Thompson (Newsletter Editor)
In this issue:
Consultation on draft bill to simplify charity laws
Changes to charitable incorporated organisations legal form
Model memorandum and articles for charitable companies was 'shamefully' late
Oxfam case could bring a VAT windfall to the sector
Charity Tribunal abolished in existing form
'Conflict of interest' in sole charity trusteeships
Guidance on privacy notices in data collection
Consultation on draft bill to simplify charity laws
Paul Jump, Third Sector Online, 14 September 2009
No big policy changes, says Office of the Third Sector
The Office of the Third Sector has launched a consultation on a draft version of a consolidation bill that will bring together and simplify all major legislation relating to charities in England and Wales.
The bill, which was promised during the passage of the Charities Act 2006, will bring together provisions from the Recreational Charities Act 1958, the Charities Act 1993 and most of the Charities Act 2006.
OTS said the bill is not intended to introduce significant policy changes, but will repeal obsolete provisions and correct minor drafting mistakes and inconsistencies in the existing legislation. It said the bill will also present the text in a simpler and more accessible way, such as splitting up longer sections.
Changes to charitable incorporated organisations legal form
David Ainsworth, Third Sector Online, 17 September 2009
Office of the Third Sector wants CIOs in place by spring 2010
The Office of the Third Sector and the Charity Commission have outlined several changes to the proposed rules for charitable incorporated organisations in their response to a consultation held last year.
The CIO, which will be a new legal form for charities, is expected to be popular among third sector organisations because it will limit the liability of trustees, but without requiring them to register with Companies House. They will instead be regulated entirely by the Charity Commission.
The new proposals remove a suggestion that CIO trustees should have a lower duty of care than exists at the moment, and will replace a number of minor criminal offences with Charity Commission powers similar to those that currently exist for other charities.
They also include less public disclosure of the details of trustees and members.
The response said that it hoped the new legal form would be introduced by spring 2010.
Model memorandum and articles for charitable companies was 'shamefully' late
John Plummer, Third Sector, 22 September 2009
Charity Commission published examples less than two weeks before new company registration rules are due to come into force
The Charity Commission has been criticised for failing to amend its model memorandum and articles for charitable companies until little more than a week before new guidance is due to be implemented.
The Companies Act introduces new company registration rules on 1 October, which include changes to clarify questions on conflicts of interests and directors' benefits.
Full article and more information
Oxfam case could bring a VAT windfall to the sector
Third Sector, 15 September 2009
The charity is arguing that a change should be made to the method used to calculate how much VAT it is owed as a result of a case won by the Children's Society in 2005.
The Children's Society case allowed charities to include VAT on payments to fundraisers in the total amount used to calculate how much VAT they could reclaim.
Oxfam, which hopes to win almost £3m from HMRC from the case, says the method used to calculate its VAT was not part of a binding contract with HMRC and should have been changed and applied retrospectively to 1997. It argues fundraising should never have been counted as a non-business expense in the method used by HMRC for calculating its total VAT bill.
Charity Tribunal abolished in existing form
Third Sector Online, 2 September 2009
The Charity Tribunal has been abolished in its current form and amalgamated into a new two-tier tribunal structure as part of wider reforms to the service.
As from yesterday, appeals against final decisions of the Charity Commission will be heard in the General Regulatory Chamber of the First-tier Tribunal .
Onward appeal will be to the Upper Tribunal and then to the Court of Appeal. Appeals to the High Court will no longer be allowed.
Charity Tribunal president Alison McKenna and the rest of the members of the Charity Tribunal will be transferred into the new structure under ongoing streamlining of the tribunals service.
McKenna will be able to sit in both the Upper Tribunal and the GRC, while the other five legal and seven lay members will sit only in the GRC.
Kevin Sadler, chief executive of the Tribunals Service , said: "The changes are all designed to improve the tribunal process, making it more user-focused, consistent, streamlined and efficient across the board."
'Conflict of interest' in sole charity trusteeships
David Ainsworth, Third Sector, 29 September 2009
Local councils should be joined by independent trustees, says legal expert
Conflicts of interest frequently arise when a local authority is the sole corporate trustee of a charity, according to a lawyer who has fought to prevent councils acting beyond their powers.
Jonathan Brinsden, a partner at specialist charity law firm Bircham Dyson Bell , said one solution was to appoint additional trustees so the interests of the council could not be put above those of the charity.
Brinsden has twice advised local residents on how to prevent councils selling off charitable assets. Hundreds of charities have councils as the sole trustee, often for historical reasons.
Guidance on privacy notices in data collection
VolResource, 10 September 2009
A 'Privacy notices code of practice' has been produced by the Information Commissioner's Office on the use of such notices when collecting information about people for use by an organisation. It sets out guidance on what a privacy notice should contain, with examples based on real privacy notices, and emphasises that it needs to explain the less obvious elements of how an individual's personal data could be used. See Link.
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