If a charity that operates in Scotland is registered elsewhere, it must also register with the Office of the Scottish Charity Regulator. The Charity Commission makes no similar demand.
The difficulty for English and Welsh charities that also operate in Scotland is ensuring that their charitable purposes are defined in such a way that the OSCR, the Charity Commission, HM Revenue & Customs and the charity itself are all satisfied. Such charities often restrict their purposes to areas where the definitions overlap, resulting in a lowest-common-denominator approach. No parliament seems to have considered this when legislation was being developed.
Another issue is that once they are on the Scottish register, charities can find it hard to 'escape' the OSCR. If a charity withdraws from this register, the OSCR can by law apply an 'asset lock' to all land, property and investments held anywhere by that charity immediately before its withdrawal. The OSCR is also permitted to continue applying its compliance regime for as long as those assets exist. This would be a particularly difficult issue if a charity wanted to alter its purposes: the OSCR would be able to insist that all the assets be used for the old purposes. It is impossible to say whether OSCR would use these powers in practice.
If dual registration does not appeal, the options are limited: withdrawal from Scotland or the establishment of a separate Scottish charity, with all the associated costs and complications. Aware of the difficulties, the OSCR and the Charity Commission agreed in December 2006 to defer active monitoring of cross-border charities pending further work. The OSCR carried out a consultation in late 2008 and says it hopes to be able to overcome many of the concerns raised. We should all hope its optimism is not misplaced.
- Colette Burden is a solicitor in the charity team at Balfour & Manson