Draft Protection of Charities Bill
The government has accepted most, but not all, of the recommendations in the joint parliamentary committee's scrutiny report on the draft Protection of Charities Bill. The government's insistence on maintaining the breadth of the Charity Commission's proposed new discretionary power to disqualify a charity trustee where either HM Revenue & Customs has deemed them not to be a fit and proper person or they have been cautioned for an offence in the UK provides a point to watch as the drafting of the bill evolves.
The government has accepted that the failure to follow specified good practice will not, in itself, be considered evidence of misconduct or mismanagement of a charity. This is particularly welcome given concerns about the commission's explanation of charity trustees' duties in its redraft of the guidance The Essential Trustee (CC3). It will be interesting to see how both the explanatory notes to the bill and the final version of CC3 (due to be published in early summer) deal with this issue.
Law Commission consults on reform
The Law Commission has published a 300-page consultation report setting out provisional proposals for reform on a wide range of issues, including simplifying the charity land disposal regime and providing a more flexible form of permanent endowment. Charity lawyers who routinely wrestle with inefficiencies and unnecessary complexities in the existing law will welcome the proposals. The consultation closes on 3 July.
Finance Act 2015
The act, which received royal assent shortly after the Budget, included measures to exclude payments from a subsidiary company to a charity from being treated as a contrived tax mismatch arrangement to which the new diverted profits tax applies. Without this exemption, it was feared that it would become impossible for charities to use trading subsidiaries. It also enables some VAT reclaims for hospices, search and rescue, air ambulance and medical courier charities, and makes it easier to claim Gift Aid on donations made through non-charity intermediaries by digital channels such as text message or online.
CASCs: new guidance
HMRC has published detailed guidance notes on the community amateur sports club scheme, updated for the changes to the eligibility conditions and the increases in the thresholds on the corporation tax exemptions for a CASC's property and trading income, which took effect from 1 April. The guidance is intended to help CASCs apply the new rules, which have been criticised for being overly complicated. Existing CASCs have until 1 April 2016 to meet the requirements of the new rules. If they are unable to do so, they will be deregistered with effect from that date.
This column is written by Adrian Pashley, charities editor at Thomson Reuters, Practical Law, on behalf of the Charity Law Association