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Charity Matters

16 May 2019 by Cecile Gillard

Charity Matters

The 2019 Charity Annual Return features some new and amended questions

New and amended questions, some compulsory when in prior years they were optional, feature in the 2019 Charity Annual Return. This Return must be filed with the Charity Commission by all CIOs and by non-CIO charities with annual income over £10,000.

On fundraising, there are questions about whether the charity works with professional fundraisers and, if it does, whether it has the required written agreements in place with each one. There is also a question about whether the equivalent agreements are in place with commercial participators involved with the charity’s fundraising activities.

A range of more detailed information regarding employee remuneration and benefits must now be provided. Whilst some of the disclosures are in salary bands, for the highest paid staff member the charity must state the value of that person’s total benefits package.

If the charity has a trading subsidiary, it must state how many of the charity’s trustees serve on the subsidiary’s board.

Some adjustments have been made to the wording of questions about serious incident reporting. This reflects the revised Charity Commission guidance for charities on the reporting regime.
Other new areas addressed include:

  • what contracts the charity has with central government or local authorities
  • whether any grant funding was provided to the charity by either of those sources and, if so, financial details are required
  • whether any of the charity’s income came from outside the UK and, if so additional details are required
  • where there has been overseas expenditure, a number of questions require details such as the monitoring procedures and risk controls in place, as well as the methods by which the funds were transferred
  • whether Disclosure and Barring Service checks have been obtained on all trustees, employees and volunteers in eligible positions.

The financial size and the legal form of the charity making the Return (the legal type of organisation – for example CIO charitable incorporated organisation or CLG charitable company limited by guarantee) affects which questions must be answered. The shortest list of questions applies to those charities within the ‘light touch’ annual reporting regime – that is non-CIO charities with annual income below £10,000. This can cause confusion for smaller CIOs, as they do have to answer questions that other small charities do not.

Digital and Data Protection

The Information Commissioner’s Office is consulting on a proposed new Code of Practice for the design, development and provision of online services likely to be accessed by children. The Code is for providers of online products and services that process personal data and are likely to be accessed by children. It aims to provide practical guidance on designing data protection and safeguarding principles into online services. There are sixteen proposed standards, beginning with the best interests of the child. Other intended focuses are high privacy and data minimisation as default principles. There is also a strong focus on transparency, governance and accountability issues. The final version will be a statutory code of practice under the Data Protection Act 2018.

Tax Matters

The 2018 Autumn Budget statement indicated the government’s intention to introduce reforms to the IR35 legislation on ‘off-payroll’ working. The current provisions are intended to prevent tax avoidance when workers provide their service via a personal service intermediary. The changes are mainly expected to affect medium and larger sized private sector organisations from 6 April 2020. The size threshold may be determined on similar criteria to the ‘small company’ threshold in the Companies Act 2006.

An important aspect of the proposals is to place new responsibilities on the organisation engaging the worker, including possibly an obligation to review the employment status of all workers they engage through a personal service intermediary.

Responses to the current HMRC consultation on the proposals can be made until 28 May. Provisions for the changes will then be placed in the 2019 Finance Bill. In the meantime, the Charity Tax Group has provided a helpful commentary on the story so far and HMRC has issued guidance on how organisations can prepare for the expected changes. 

Cecile Gillard is a charity law, regulation and governance specialist

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