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CHANGES TO THE CHARITY REGISTRATION PROCESS

Added 17/3/12. This information updates s.8.2.4 in The Russell-Cooke Voluntary Sector Legal Handbook (VSLH3).
From 1 March 2012 the Charity Commission has made it compulsory, rather than simply 'encouraged' as it was previously, for all supporting documents to be submitted as PDFs at the same time as the online application for charity registration. This includes governing document, trustee declaration, bank statements and all other supporting documentation. The change is described at tinyurl.com/38hubcn.

The Commission says that its website explains how to generate PDF files, but one reference, at tinyurl.com/898fllx, is not only badly laid out but is also, in my view, confusing and unhelpful. It says, "From 1 March 2012 you will need to attach your governing document and signed trustee declaration as PDF files at the time you submit your application. ... You will only be able to produce PDF files on your computer if it has PDF writing software. Such software enables you to prepare PDF files and can convert other formats to PDF. It can also create them in conjunction with a scanner. If you are unsure about this type of software you will need to take advice on whether different products are compatible with your computer."

This does not make clear that:

• all documents, not just the governing document and trustee declaration, must be submitted as PDFs;
• some programs such as recent versions of Microsoft Office will save documents in PDF format, but even with this facility, PDF writing software and a scanner will be essential because at least some of the documents will be in paper format;
• PDF writing software can be downloaded free of charge;
• some scanners will scan only into photographic formats (jpeg, tiff, gif or bitmap) and if the Commission means what it says about all documents having to be in PDF, these other formats will not be acceptable;
• most (or all?) scanners will only scan single-sided documents, so if a document such as a bank statement is double-sided each page will have to be scanned as a single document, or — if the scanner can scan multiple-page documents — a photocopier will be needed to copy the reverse of each page so all pages can be scanned together as a single document.

CHARITY REGISTRATION IN NORTHERN IRELAND

Updated 20/8/13. This information updates ss.4.4.6, 5.3.8 & 8.4 in The Russell-Cooke Voluntary Sector Legal Handbook (VSLH3).
THIS ARTICLE NEEDS TO BE UPDATED, WHICH WILL BE DONE AS SOON AS POSSIBLE.
The Charity Commission for Northern Ireland (CCNI) remains on course to start registering charities in autumn 2013, with a phased process. The Charities (2008 Act) Commencement No.4 Order (Northern Ireland) 2013 brought into effect, on 24 June 2013, many provisions of the Charities Act (Northern Ireland) 2008 giving powers to the CCNI and placing requirements on registered charities.

The 2008 act created for the first time a statutory framework for charities in Northern Ireland and established the CCNI and a charity tribunal, But implementation was delayed by uncertainty about the legal interpretation of the public benefit provision in s.3 of the 2008 act, exacerbated by differing views about whether all charities should be required to demonstrate public benefit or whether some types of charities should be presumed to be for the public benefit, without having to demonstrate it as part of the registration process.

Finally the Charities Act (Northern Ireland) 2013, which received royal assent on 18 January 2013, amended the 2008 act to make clear that all charities in NI are required to demonstrate how they benefit the public. But it will be up to the CCNI to determine whether or not a charity is set up for the benefit of the public, rather than having, as the 2008 act provided, a prescribed test enshrined in legislation.

As soon as the 2013 act was in place the CCNI opened a public consultation, from 4 February to 6 May 2013, on its public benefit and registration guidance. The final statutory guidance, The public benefit requirement, was published in July 2013 and can be accessed, along with a glossary and frequently asked questions, via tinyurl.com/ph82659. Supplementary information on the 12 purposes set out in the 2008 act is being finalised.

From 19 August 2013, the Charities Act 2008 (Transitional Provision) Order (Northern Ireland) 2013 replaces the 2011 order with the same name. The 2013 order makes clear that organisations which as of 19 August 2013 are registered as charitable for tax purposes with HM Revenue & Customs are to be treated as charities until a decision is made about whether they are to be registered with CCNI. CCNI has referred to these charities as "deemed charities". The distinction is necessary because there may be some situations where HMRC has granted charitable status for tax purposes, but CCNI, when it comes to register the organisation, decides that its purposes do not fall within the 2008 act or are not for the benefit of the public so it cannot be registered.

In early October 2013 the CCNI will start a public consultation on its interim reporting proposals for registered charities, followed by a consultation in 2014 on the format, structure and content of the full accounting and reporting requirements. During the interim period, registered charities will be required to provide their accounts and reports and complete an annual return covering their activities, governance and finances, but the accounts and reports can be in the format they currently use. Information about the consultation is at tinyurl.com/o5jvyhv.

The CCNI's website includes information about cy près schemes, which allow property or funds to be used for charitable purposes other than those for which it was originally intended. The CCNI can consider such schemes now, but cannot finalise them until further statutory provision is made, which they hope will be by late 2013. Information is at tinyurl.com/lhydbwh.

The cy près webpage also includes information about the Charity (Failed Appeals and Disclaimers) Regulations (Northern Ireland) 2013, under which the CCNI can make a scheme where an appeal for a specific purpose does not raise enough funds for the purpose (for example, for a specific project or piece of equipment), or raises too much. The regulations came into effect on 1 July 2013 and are at tinyurl.com/ku6z5vq.

Under s.167 of the 2008 act, charities that operate in NI but are based in England and Wales, Scotland, the Republic of Ireland or other countries 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. These "s.167 charities" will not be registered until all NI-based charities are registered and regulations are in place setting out the s.167 accounting and reporting requirements.

Overall, the NI legislation is similar to the 1993 and 2006 Charities Acts (now the 2011 act) 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).

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).