Note of Charity Regulators Meeting: 11 May 2011

Note of Charity Regulators meeting: 11 May 2011

Those present:

·  Frances McCandless (FM) – Charity Commission Northern Ireland (NI)

·  Terry Dunne (TD) – Ministry of Justice and Equality - Ireland

·  Jane Hobson (JH) – Charity Commission (CC)

·  Rosie Chapman (RC) – Charity Commission (CC)

·  Quentin Fisher (QF) – OSCR

·  Martin Tyson (MT) – OSCR

·  Andrew Edwards (AE) – HMRC Charities

·  Ellie Mayor (EM) – HMRC Charities

·  Linda Whewell (LW) – HMRC (for part of the meeting)

AE welcomed everyone to the meeting and began by asking for updates from each regulator.

Updates

TD (Ireland)

·  His office now falls under Department of Justice and Equality – previously it was under Department of Environment, Community and Local Government

·  The change is due to a change of government

·  Various options for progressing the charity regulation agenda have been proposed

·  TD believes that there is acceptance of the need for regulation of Irish charities given the importance of the sector and the need to maintain public confidence

FM (Northern Ireland)

·  CCNI are moving to new premises

·  There is a potential problem with the public benefit legislation in NI. This is delaying registration but other powers are now in place. Current proposed amendment would assume all religious groups, those working for relief of poverty and educational groups are charitable. Such an approach could lead to an anomaly with the Tax test which would impact on HMRC resources.

·  HMRC sent data for use by NI regulator – data was not 100% clean, but NI office wrote to 7000 organisations from list and received a response from about 5000 – these are now deemed to be charities under the jurisdiction of CCNI

QF & MT (OSCR)

·  OSCR noted that it had previously carried out the same exercise as NI to arrive at a list of charities based on HMRC data and that there were problems with duplication in the data sent by HMRC, e.g. in respect of local scout groups

·  OSCR has a new chairman (Dr Graham Forbes). In addition its current Chief Executive, Jane Ryder, will be leaving OSCR later this year. –.

·  Progress is being made with its Integrated reporting project and an on-line filing system should be introduced later this year

·  Last year OSCR also launched an outreach initiative to promote competence in professional advisors to charities. There has been a good take-up course on offer.

·  Powers to allow Scottish Charities Incorporated Organisations (SCIOs) came into force on 1 April 2011 and the first was incorporated on 12 April 2011 with 6 applications pending.

·  OSCR has published “Who’s in charge” guidance to meet demand from local government and NHS charities

JH & RC (Charity Commission)

·  Consultation on charity investments closed on 28 February

·  CC has launched a consultation on advancement of sport which will close on 31 May (CC has also registered a bridge club as a charity)

·  CC has re-published its guidance on campaigning to include a short section on referendums

·  Secondary legislation on Charities Incorporated Organisations is being taken forward by the Cabinet Office. CC has prepared model constitutions and basic guidance which is available on its website

·  Cabinet Office is also working on legislation to consolidate the 1993 and 2006 Charities Acts – the Bill is currently being considered by Parliament

AE (HMRC)

·  HMRC’s budget is being reduced, so there will be staff reductions, but the new charities on-line system means that fewer staff will be needed in HMRC Charities

·  HMRC will be consulting with regulators and other stakeholders over the summer on the new IT system; the system will be based on the existing forms

Charity Commission Strategic Review

·  A strategic review was started in October 2010 with a consultation on what people think about the CC and its work. The first stage conclusions have been published

·  The conclusions included that the Commission exists to serve the public rather than to serve charities, that it should focus more on the things that only it can do, and it should minimise interventions in order to allow the charity sector to be self reliant with less hand holding in future

Charity Commission Risk Framework

·  The Commission currently has two documents on risk on its website which cover compliance and face to face services for charities

·  These are being consolidated into one document – currently in draft

·  CC invited comments on this – AE said only comment from HMRC was to update tax relief figures

Fit & Proper Person Test

·  JH said NCVO Group looking at the regulatory powers of the Charity Commission for England and Wales and HMRC in relation to charities and fraud which was set up after concerns about the test are expecting to publish a report in the next few weeks.

·  HMRC is discussing with lawyers what information can be shared with regulators

Scotland Bill

·  In response to a query from OSCR, AE explained effect of Calman proposals on Gift Aid and the outcome of the working group on this – charity sector wants to use UK tax rate for Gift Aid.

·  OSCR also asked what happened the Calman recommendation for a single UK wide definition of a charity? This was not being taken forward as part of the Scotland Bill.

·  OSCR noted the results of the recent Scottish Parliamentary elections and suggested that this may impact on these considerations.

·  In addition, while recognising the success of the practical agreement between HMRC and themselves, OSCR reiterated the view that tax relief should also result from the ability to meet the Scottish charity test.

Public benefit requirement

·  FM said public benefit requirement could change in NI. If so, HMRC would have to look at every NI charity to see if it met the England and Wales definition. There could be problems if charities with very small education element were accepted as satisfying test in NI

Budget Changes

·  AE outlined changes announced in budget and other things that HMRC is working on

·  On-line filing due 2012/13, based on new forms that were introduced at Budget, and HMRC is looking at Gift Aid database requested by charity sector

·  IHT changes – there is a consultation

·  Gift Aid benefit limit has been raised for large donations

·  Gift Aid Small Donations Scheme to be introduced in 2013. There will be anti-fragmentation rule, but regulators expressed concern for churches – they have been encouraging umbrella bodies rather than individual churches to register. HMRC will need to consult with Charity Tax Forum and regulators on this

·  Tainted donations anti-avoidance rules to replace substantial donors rules

·  Other initiatives: promoting payroll giving, abolishing obsolete reliefs and moving all Gift Aid repayments on to Bacs

·  Improving guidance

·  Consultation on VAT and cost sharing.

Next meeting

·  Could be at NI office in autumn or added to international regulators forum in the autumn. To be confirmed idc.