Legal Update: The draft Protection of Charities Bill

Plus: online registration, Jehovah's Witnesses appeal disallowed, BeatBullying report

HMRC has launched an online registration service
HMRC has launched an online registration service

The report by the cross-party committee of MPs and peers that scrutinised the draft Protection of Charities Bill expressed broad support for new and enhanced Charity Commission powers. However, it remains to be seen how the report's detailed recommendations – some of which were adopted on the back of evidence from the Charity Law Association – around specific concerns about the breadth of some proposals will affect any legislation brought forward in the next parliament.

Of particular interest in the report is the committee's view that failure to follow "specified good practice" should not in itself be considered misconduct or mismanagement, and that this should be "made clear in the commission's guidance to trustees". This pushes back on the proposed redraft of the commission's core guidance for trustees, The Essential Trustee (CC3). The regulator's finalised redraft of CC3 is expected soon.

HMRC online registration

HM Revenue & Customs has launched a new digital service that allows registration as a charity for tax purposes to be done online. In 2013, HMRC launched a service to allow claims for charity tax relief to be made online, but charities had to have already registered with HMRC using paper form ChA1 in order to make claims. At first, the service will be accessed from the Government Gateway, but will later move to Gov.uk Verify.

Tribunal appeal rejected

The charity tribunal has refused to allow appeals against Charity Commission decisions, including the opening of a statutory inquiry, by the national body for Jehovah's Witnesses congregations. The Watch Tower Bible & Tract Society of Britain had tried to bring a judicial review of the commission's decision, but it failed to persuade the High Court that the tribunal's powers were insufficient to provide it with the remedy it sought.

When it then brought a tribunal appeal, the tribunal refused to accept the application to appeal because it was too late. The tribunal criticised the charity's litigation strategy and said that it should have applied to the tribunal in time and then applied for a stay of proceedings pending a decision on the judicial review proceedings.

'Hand-to-mouth' charities

The commission's report on the charity BeatBullying, which became insolvent last year, has found no evidence of financial misconduct or mismanagement by the charity's trustees. The report highlights the serious risks for charities that have no reserves and rely heavily on a single method of funding, such as grants. It recognises that the hand-to-mouth nature of such funding and the restrictions that are attached to some grants mean that "even experienced charities with conscientious trustees at the helm can suffer and find themselves in a position where the charity has no choice but to close".

This column is written by Adrian Pashley, charities editor at Thomson Reuters, Practical Law, on behalf of the Charity Law Association

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