OTHER CHAPTERS
I. SETTING UP AN ORGANISATION
Ch.1: Trusts & unincorporated associations
Ch.2: Companies & other incorporated structures
Ch.3: Charitable status, charity law & regulation
Ch.4: The objects clause
Ch.5: The governing document
Ch.6: Setting up an organisation
Ch.8: The organisation's name
Ch.9: Branches, subsidiaries, partnerships & mergers
II. GOVERNANCE & MEMBERSHIP
Ch.10: Members of the organisation
Ch.11: Members of the governing body
Ch.12: Officers, committees & sub-committees
Ch.13: Duties & powers of the governing body
Ch.14: Restrictions on expenses, remuneration & benefits
III. RUNNING AN ORGANISATION
Ch.15: The registered office and other premises
Ch.16: Paperwork requirements
Ch.17: Meetings & decision making
Ch.18: Legal agreements
Ch.19: Organisational & personal liability
Ch.20: Insurance
Ch.21: Financial difficulties & winding up
IV. EMPLOYEES, WORKERS, VOLUNTEERS & OTHER STAFF
Ch.22: Employees and other workers
Ch.23: Rights, duties & the contract of employment
Ch.24: Model contract of employment
Ch.25: Equal opportunities in employment
Ch.26: Taking on new employees
Ch.27: Pay & pensions
Ch.28: Working time & leave
Ch.29: Disciplinary matters, grievances & whistleblowing
Ch.30: Termination of employment
Ch.31: Redundancy
Ch.32: Employer-employee relations
Ch.33: Employment claims & settlement
Ch.34: Self-employed workers & other contractors
Ch.35: Volunteers
V. SERVICES & ACTIVITIES
Ch.36: Health & safety
Ch.37: Equal opportunities in provision of goods & services
Ch.38: Confidentiality, privacy, data protection & freedom of information
Ch.39: Intellectual property
Ch.40: Publications & publicity
Ch.41: Campaigning & political activities
Ch.42: Public gatherings & entertainment
Ch.43: Food & drink
VI. FUNDING & FUNDRAISING
Ch.44: Funding & fundraising: General rules
Ch.45: Fundraising activities
Ch.46: Tax-effective giving
Ch.47: Trading companies
Ch.48: Contracts & service agreements
VII. FINANCE
Ch.49: Financial procedures & records
Ch.50: Annual accounts, reports & returns
Ch.51: Auditors
Ch.52: Corporation tax, income tax & capital gains tax
Ch.53: Value added tax
Ch.54: Investment & reserves
Ch.55: Borrowing
VIII. PROPERTY
Ch.56: Land ownership & tenure
Ch.57: Acquiring & disposing of property
Ch.58: Business leases
Ch.59: Property management & the environment
IX. BACKGROUND TO THE LAW
Ch.60: How the law works
Ch.61: Dispute resolution & litigation
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UPDATED INFORMATION FOR CHAPTER 7:
VOLUNTARY SECTOR LEGAL HANDBOOK
This page contains information that has appeared on Sandy Adirondack's legal update website for voluntary organisations at www.sandy-a.co.uk/legal.htm. For current updates, including potential changes that are in the pipeline, see the legal update website.
These websites for each chapter update
the 2nd edition of The Voluntary Sector Legal Handbook by Sandy Adirondack and James Sinclair Taylor (Directory of Social Change, 2001). The websites are not intended as a comprehensive update and should not be treated as such.
To order a copy of The Voluntary Sector Legal Handbook, print out the order form at www.sandy-a.co.uk/bookserv.htm or send an email order by clicking
. It costs £50 for voluntary organisations or £80 for others, plus 10% p&p. We expect the third edition to be published in 2007.
The information here covers the law applicable to England and Wales. It may not apply in Northern Ireland and/or Scotland. These news items are not a full or definitive statement of the law and are not intended as a substitute for professional legal advice. No responsibility for loss occasioned as a result of any person acting or refraining from acting can be taken by the author.
Chapter 7
REGISTERING AS A CHARITY
THE CHARITIES ACT 2006
Updated 8/12/06.
The Office of the Third Sector announced on 5 December 2006 the proposed timetable for implementation of the Charities Act 2006. The Act, which received royal assent on 8 November 2006, will come into effect in stages over the next two years, with the first commencement order expected in early 2007, the second in the second half of 2007, and the third in early 2008.
The Act (in pdf format) is at www.opsi.gov.uk/acts/acts2006/ukpga_20060050_en.pdf, and in html format at www.opsi.gov.uk/acts/acts2006/20060050.htm.
Explanatory notes to the Act are at www.opsi.gov.uk/acts/en2006/2006en50.htm.
The Charity Commission's guide to the main provisions is at www.charitycommission.gov.uk/spr/ca2006prov.asp.
For the Office of the Third Sector's implementation timetable click here (the address is too long to show on screen).
The summary below lists some of the changes that may affect small and medium charities, with the expected implementation dates. It is not full summary of the Act and does not cover all provisions.
Charities Act 2006
REGISTRATION THRESHOLD FOR SMALL CHARITIES
Updated 21/5/07. This information updates s.7.1.1.1 in The Voluntary Sector Legal Handbook 2nd edition.
From 23 April 2007, the threshold at which charities have to register with the Charity Commission is increased from £1000 to £5000. If an organisation based in England or Wales is charitable and has annual gross income of £5000, it must be registered with the Charity Commission unless it is excepted or exempt from registering (see excepted and exempt charities). Gross income is defined as gross income in the immediately preceding financial year, unless the Charity Commission determines otherwise in relation to a specific charity.
Under the 1993 Act, charities which occupy rateable land or have permanent endowment were required to register even if their income was under the threshold. This requirement does not apply under the 2006 Act.
Charities under the threshold which are already registered will remain on the register unless they ask to be removed. Charities with income under the threshold will be able to register voluntarily, but voluntary registration is unlikely to be available until 2009 except for charities which can convince the Commission they have a particular need to register. Even if a charity is not registered with the Commission it must comply with charity law and is under the jurisdiction of the Commission.
These provisions are in s.9 of the Charities Act 2006, which replaces s.3 of the Charities Act 1993 with ss.3-3B; s.10 of the 2006 Act; and the Charities Act (Interim changes in threshold for registration of small charities) Order 2007 which is at www.opsi.gov.uk/si/si2007/20070789.htm. For links to the Acts and guidance, see The Charities Act 2006.
Charities Act 2006: Not yet in effect
REGISTRATION OF EXEMPT CHARITIES
Updated 18/11/07. This information updates s.7.1.2 in The Voluntary Sector Legal Handbook 2nd edition.
When the relevant provisions come into effect (expected 2009), exempt charities which have a "principal regulator" who will monitor them for compliance with charity law will remain exempt from registration with the Charity Commission. The Commission will have power to investigate such an exempt charity if the principal regulator requests this.
Where there is no principal regulator, previously exempt charities will come under the jurisdiction of the Charity Commission, and if their annual income is over £100,000 will be required to register with the Commission. The registration threshold may be reduced after review in 2011. These provisions will apply in particular to charitable industrial and provident societies (unless they are registered social landlords).
These provisions are in s.11-14 of the Charities Act 2006, which amend s.24 & schedule 2 and insert new s.86A to the Charities Act 1993; and schedule 5, which amends ss.6,8,9,16-18,28,33 and 73 of the 1993 Act. For links to the Acts and guidance, see The Charities Act 2006.
Charities Act 2006: Not yet in effect
REGISTRATION OF EXCEPTED CHARITIES
Updated 18/11/07. This information updates s.7.1.3 in The Voluntary Sector Legal Handbook 2nd edition.
When the relevant provisions come into effect (expected 1 October 2008), many charities which are currently excepted from registration will be required to register if their annual gross income is over £100,000. Those under £100,000 will not be required to register but will come under the jurisdiction of the Charity Commission. These changes will primarily affect churches and similar religious bodies, armed forces charities, and Scouts and Guides.
The £100,000 limit will be reviewed in 2011 and may be reduced.
This provision is in s.9 of the Charities Act 2006, which replaces s.3 of the Charities Act 1993 with ss.3-3B. For links to the Acts and guidance, see The Charities Act 2006.
ONLINE REGISTRATION FOR SOME CHARITIES
Added 5/4/08. This information adds to s.7.2 in The Voluntary Sector Legal Handbook 2nd edition.
From February 2008 charities which use an approved (also called standard) governing document can register online. The Charity Commission has approved governing documents for about 80 types of organisation, including Age Concern, Citizens Advice Bureau, Neighhourhood Watch, and pre-school playgroups. For charities using an approved governing document, the average registration time is 15 days (compared with 32 days for other charities); the Commission hopes to reduce the registration time for online applications to five days by the end of 2008.
The Commission's intention is to extend online registration to all charities.
Information about charity registration, including the online application form and a list of approved governing documents, is at www.charitycommission.gov.uk/registration.
DETAILS OF NEWLY REGISTERED CHARITIES
Added 18/11/07. This information adds to s.7.2 in The Voluntary Sector Legal Handbook 2nd edition.
From 31 October 2007 the Charity Commission is including on its website a list of all newly registered charities. The list is arranged alphabetically by postcode of the charity correspondent, and it is possible to view charities registered in the last seven days or the previous week, month or quarter.
The list of recently registered charities is at www.charitycommission.gov.uk/registeredcharities/recent.asp.
REVISED MODEL GOVERNING DOCUMENTS
Updated 12/7/04. This information updates s.7.2.2 in The Voluntary Sector Legal Handbook 2nd edition.
The Charity Commission has revised its model memorandum and articles of association for charitable companies (GD1), trust deed for charitable trusts (GD2),and model constitution for charitable unincorporated associations (GD3). The models are at www.charitycommission.gov.uk/registration/mgds.asp.
In addition the Charity Law Association has revised its own model governing documents. Unlike the Charity Commission's these are not free (they cost £15 each or £40 for all three on disk), but many practitioners feel they are more comprehensive than the Commission's. To email the Charity Law Association for details, click . (To reduce spam, an email address is not given on screen. If you cannot connect by clicking, hold your cursor over the underlined "here" and the email address will appear in your taskbar.)
CHANGES IN CHARITY REGISTRATION
Updated 25/3/03. This information updates s.7.2.4 in The Voluntary Sector Legal Handbook 2nd edition.
From 1 April 2003 the Charity Commission's London office is no longer registering charities. Registration of charities with actual or expected annual income below £10,000 must now apply to the Liverpool office, and those with income over £10,000 must apply to Taunton.
This information updates s.7.2.6 in The Voluntary Sector Legal Handbook 2nd edition.
Many charities with an annual income under £10,000 are able to go through a simplified process for registering with the Charity Commission, under which fewer checks are carried out. The charity must use an agreed standard or model governing document, have charitable objectives that are recognised by the Commission, and not be "higher risk" (working with children, elderly people, people with learning difficulties or other vulnerable people). Information about the process, the Commission's registration pack (for all charities, not just small ones) and copies are the Commission's model governing documents are available from the Commission on 0870-333 0123 or at
www.charitycommission.gov.uk/registration/regpack.asp.
CRB CHECKS ON CHARITY TRUSTEES
Updated 25/3/08. This information updates s.7.2.4 in The Voluntary Sector Legal Handbook 2nd edition.
From 1 October 2007, most organisations working with children or providing care services to vulnerable adults and seeking charity registration must provide the Charity Commission with a signed declaration that Criminal Record Bureau checks have been carried out for their proposed trustees. This rescinds a previous requirement to provide the Commission with evidence of the checks.
Details of the Charity Commission's requirements are at www.charitycommission.gov.uk/registration/crb.asp.
In addition to the Commission's requirements for trustees of new charities, it is unlawful for any person to serve as a trustee of a "children's charity" as defined in the Protection of Children Act 1999 unless a CRB check has been carried out.
In a report issued in November 2007, the Commission made clear that trustees who fail to carry out such checks on new trustees or staff could themselves be in breach of their duty of care to the charity. The report, which can be accessed via tinyurl.com/2syx6w, is into an unnamed charity which recruited a staff member and trustee with criminal records, who posed a "high risk" to vulnerable beneficiaries.
Detailed information about CRB and other checks on potential trustees for both new and existing charities is in CC30 Finding new trustees: What charities need to know, updated in October 2007. This is at www.charitycommission.gov.uk/publications/cc30.asp.
For information about the Commission's general guidance on safeguarding children see www.sandy-a.co.uk/employment.htm#ch-ldprotection.
CHARITIES OPERATING IN SCOTLAND
Updated 18/11/07. This adds a new s.7.5 to The Voluntary Sector Legal Handbook 2nd edition.
Non-Scottish charities with a "significant presence" in Scotland must register with the Office of the Scottish Charity Regulator (OSCR). Charities which are not registered in Scotland cannot refer to themselves as a charity there. Guidance for English and Welsh charities (which also applies to charities in other countries) can be accessed via tinyurl.com/ypp29x.
Because the definitions of what is legally charitable are different in Scotland and in England/Wales, some charities are having to amend their governing document before being able to register in Scotland. This could happen where the objects as worded are not charitable under Scottish law, or where the dissolution clause allows the organisation's property to be given to organisations which do not meet the criteria for Scottish charities. OSCR and the Charity Commission have agreed model clauses for these situations, but even if using these wordings, consent must be obtained from the Commission and OSCR before amending the governing document. The guidance is at tinyurl.com/2s4b6b.
The registration requirement does not apply where a cross-border charity is already recognised as a charity in Scotland by HM Revenue and Customs. Where a charity has branches only the parent charity has to register, not individual branches.
For cross-border charities there are differences in trustee duties (the duties in Scotland are included as part of the Charities and Trustee Investment (Scotland) Act 2005), and in administrative requirements such as what has to be on stationery (for example, a charity which operates in Scotland but does not need to register there must indicate on its stationery, website, cheques etc that it is "a registered charity in England and Wales"). In addition, charities registered in Scotland have to obtain OSCR's consent for change of name, constitutional amendments relating to purpose, merger and dissolution.
For guidance on consents and notifications required under the Scottish Act, click tinyurl.com/yrrfxo.
The Charities and Trustee Investment (Scotland) Act 2005 is at
www.opsi.gov.uk/legislation/scotland/acts2005/20050010.htm.
Explanatory notes are at www.opsi.gov.uk/legislation/scotland/en2005/2005en10.htm.
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