Charities Act review: Regulation

A summary of the main proposals, with sector reaction and an assessment of what's likely to happen

Recommendations include charging for the late filing of charity accounts
Recommendations include charging for the late filing of charity accounts

Main proposals

- Sanctions for the late filing of charity accounts with the Charity Commission should include withdrawal of Gift Aid; consideration should also be given to fines.

- Government and the commission should develop a "fair and proportionate system" of charging for filing annual returns and the registration of new charities.

- The commission should concentrate on its core functions and be more proactive in deterring, identifying, disrupting and tackling abuse of charitable status.

- The income threshold for charities to register compulsorily should rise from £5,000 to £25,000, matching the threshold for filing accounts.

- Information submitted by charities to the commission should be combined in a single document with a list of key risk indicators that would help the commission select samples for investigation.

- The processes of applying for registration with the commission and for tax relief from HM Revenue & Customs should be combined, and work should continue to create a single reporting system for incorporated charities.

- The income level at which charities are required to have their accounts audited should increase from £500,000 to £1m.

Sector reaction

The chief executives body Acevo has welcomed the proposal for fines for late filing; other sector bodies favour further consideration. The Charity Commission prefers loss of Gift Aid, but the National Council for Voluntary Organisations, the Charity Finance Group, Navca and the Association of Charitable Foundations are against it. The NCVO, CFG and others are also against charges for registering charities and filing annual documents. Raising the income threshold for compulsory registration is opposed by the NCVO, Navca and the Directory of Social Change, which says that, despite provisions for voluntary registration, too many small charities would be deprived of charity registration numbers, which could damage fundraising.

What's likely to happen?

Fines and charges would not meet the government's criterion of making it easier to run a charity and could attract criticism from the opposition. There could also be a battle with the Treasury about whether the income from such measures should be deducted from the commission's budget. Ministers are less interested in 'big-stick' solutions than in incremental measures, some of which - including a single system for charities to report to both the Charity Commission and Companies House - are being developed.

Read in more detail about: trustees, fundraising, social investment, and complaints and the charity tribunal

See Editorial

Read other news about Lord Hodgon's review

Have you registered with us yet?

Register now to enjoy more articles and free email bulletins

Already registered?
Sign in

Latest Jobs

RSS Feed

Third Sector Insight

Sponsored webcasts, surveys and expert reports from Third Sector partners


Expert hub

Insurance advice from Markel

How bad can cyber crime really get: cyber fraud #1

Promotion from Markel

In the first of a series, we investigate the risks to charities from having flawed cyber security - and why we need to up our game...

Third Sector Logo

Get our bulletins. Read more articles. Join a growing community of Third Sector professionals

Register now