Don Bawtree: Charity Commission warns of 'crime prevention' phishing scams

Plus: Regulation north of the border; lessons to be learnt from annual reports; and monitoring statistics

Don Bawtree
Don Bawtree

The Charity Commission has issued a warning it hopes will save charities from financial loss. The warning says that fraudsters are sending out a large number of phishing emails with the subject heading "crime prevention advice". They are also sending out a lot of similar emails to businesses with the subject heading "notice of intended prosecution" or "NIP - notice number", followed by a combination of letters and numbers.

Because emails in this second category purport to have been sent by Greater Manchester Police, the commission says this will be of most relevance to charities based in the north west. This is useful guidance, but having received one personally while writing this I can testify that it is certainly not limited to the north west.

More warnings from the Charity Commission can be expected, but this time they will be issued under its official warning regime. Recent guidance sets out when an official warning might be issued and how to respond. Matters that might generate such warnings include reckless behaviour and failing to submit accounts. Failure to take appropriate steps might result in the commission taking further investigatory action.

Trustees need to be particularly aware of the fact that the commission might publicise that it has issued a warning. Charities that are concerned about this are directed to the operational guidance.


The Office of the Scottish Charity Regulator has just celebrated 10 years of existence, so it is timely to report two Scottish developments. The Fundraising Preference Service is due to be implemented in 2017 in England and Wales by the Fundraising Regulator, but the Scottish Fundraising Implementation Group has concluded that Scottish charities do not need further regulation. It does not think the new system in England and Wales would offer anything over the current requirements, and instead charities need to fully understand their legal obligations and get ready for the new data protection legislation, which will probably be in force before the UK leaves the European Union.

From 6 April 2017 the Scottish parliament will set the income tax rates and limits that apply to Scottish taxpayers' earned income. New regulations will therefore be made before the 2017/18 tax year, but it is not yet clear how Gift Aid will operate in respect of cross-border donations if Scottish and UK tax rates differ. Four options are being considered, all of which have complications. Charities raising money from cross-border donors will need to take care when phrasing fundraising literature involving Gift Aid.

Lessons to be learned

There are more lessons to learn from the corporate world as charities consider their year-end accounts. First, Sports Direct has been criticised by the Financial Reporting Council for the content of its annual report. It drew attention to the uneven use of key performance indicators and the lack of narrative about a poorly performing business. The report has now been amended. Will the day ever arrive when the Charity Commission requires annual reports to be amended to provide a better balance?

Second, a survey by the investment professional association the CFA Society suggests many companies are still failing to clearly report on the state of their businesses. Investors now see less point in annual reports, and 80 per cent think the chairman's statement is useless. Most investors believe company reports still contain too much irrelevant information. There is still much to be done - charities take note.

Monitoring statistics

The Charity Commission has published monitoring statistics for the last year. From the various tables, one might conclude that the worst-run charity would be a tiny, 10-year-old Christian training college, and the best a slightly larger six-month-old Buddhist ambulance service. That might be a good illustration of the need for care in interpreting key performance indicators.

Don Bawtree is lead partner for charities at accountants BDO LLP

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