CHARITY REGISTRATION STILL DELAYED IN NORTHERN IRELAND

Updated 4/1/12. This information updates ss.4.4.6, 5.3.8 & 8.4 in The Russell-Cooke Voluntary Sector Legal Handbook (VSLH3).
The Charities Act (Northern Ireland) 2008 creates for the first time a statutory framework for charities there and establishes a Charity Commission for Northern Ireland (CCNI) and charity tribunal. But charity registration and the creation of the register of charities, which were expected to start in the first half of 2010, have still not started, and the rules for public collections and the introduction of the charitable incorporated organisation did not come into effect in 2011 as originally expected.

In the meantime, the Charities Act 2008 (Transitional Provision) Order (Northern Ireland) 2011 allows the CCNI to regulate (but not yet register) approximately 7,000 organisations already registered as charitable with HMRC. These organisations on the "deemed" list of charities (as they are called by the CCNI) are listed on the CCNI website and must provide updated information to the CCNI, and the CCNI has power to investigate complaints about them. New charities should continue to apply for registration with HMRC, and will be added to the list on the CCNI's website on a quarterly basis. The CCNI will also assume, in 2012, its powers to make cy près schemes allowing property or funds to be used for charitable purposes other than those for which it was originally intended.

The delay in registering charities has been caused by an inconsistency in the drafting of the Act. The NI legislation includes the England/Wales Charities Act 2006 definition of a charitable purpose as "a purpose which is for the public benefit", but the NI Act also says that in assessing whether an organisation is charitable, it will be assessed on the same basis as Scottish charities are under the Charities and Trustee Investment (Scotland) Act 2005: whether it "provides or intends to provide public benefit". This leaves it unclear whether a prospective charity is to be assessed on the basis of its stated purposes (as in England and Wales) or its actual or proposed activities (as in Scotland).

The Department for Social Development, which is responsible for drawing up charity law in NI, put forward proposed legislation in February 2011 that would make clear that the England/Wales criteria would apply. It was proposed that the new legislation go through on an accelerated procedure so it could be passed before the Assembly was dissolved on 24 March. However, s.3 of the 2008 Act says that in determining whether an organisation is for the public benefit, "it is not to be presumed that a purpose of a particular description is for the public benefit". The expectation was that the CCNI would vet all organisations, even those already registered with HMRC, to confirm they comply with NI law before registering them. But after putting forward its proposed legislation in February to clarify the definition of public benefit, DSDNI was asked to include amendments that would reintroduce a presumption of public benefit for organisations whose purpose is the advancement of religion, advancement of education or relief of property. This would be a major change, inconsistent with the current approach in both England/Wales and Scotland.

The three options now being considered are: (1) all charities in NI would be required to demonstrate how they benefit the public, as is provided for in the 2008 Act, but it would be up to the CCNI to determine whether or not a charity is set up for the benefit of the public, rather than having a prescribed test enshrined in legislation; (2) the presumption of public benefit would be restored to those charities working for the relief of poverty, the advancement of education and the advancement of religion (the three original heads of charity); or (3) the presumption of public benefit would be restored, but only for those charities that are engaged in the advancement of religion. At the end of 2011, no decision had been made and it was not expected that charity registration would start until October 2012 at the earliest.

When registration finally starts, it is expected that charities based in England/Wales, Scotland or the Republic of Ireland that operate in NI will have to register with CCNI and submit financial returns to CCNI, but it will be a "light touch" registration rather than full registration, and they will be included on a "parallel register" which will not require them to show that they are legally charitable under NI law (s.167).

Overall, the NI legislation is similar to the 1993 and 2006 Charities Acts for England and Wales. Some significant differences are:

• "The advancement of peace and good community relations" is included in the charitable purpose that includes the advancement of human rights, conflict resolution, reconciliation etc (s.2(3)).
• Promoting the efficiency of the armed forces is not a charitable purpose, as it is in England and Wales.
• As in Scotland all charities will be required to register, with no exemptions or exceptions as there are in England and Wales (s.3).
• "Designated religious charities" which meet certain criteria will have more organisational freedom than other charities (s.165).