CHARITY LAW ASSOCIATION UPDATE
June-November 2005
JOSHUA WINFIELD
Barrister, 11 Old Square, Lincoln’s Inn
30th November 2005
CONTENTS
1. LEGISLATION
2. CASES
3. CHARITY COMMISSION
4. REVENUE & CUSTOMS
5. NATIONAL COUNCIL FOR VOLUNTARY ORGANISATIONS
6. HOME OFFICE
7. JOURNALS
LEGISLATION
Charities Bill
The Bill went through its House of Lords committee stage on 28 June and 12 July and its Report Stage on 12 and 18 October, and had its Third Reading on 8 November 2005. It will now pass to the House of Commons. The up-to-date text of the Bill is available at:
http://www.publications.parliament.uk/pa/cm200506/cmbills/083/2006083.htm
Acts
Finance (no 2) Act 2005
Royal Assent: 20 July 2005.
Section 11 of the Act, which comes into force on 6 April 2006, changes the rules in s 25(5E) to (5G) of the Finance Act 1990 applying to Gift Aid on donations that attract a right of free admission to charity property.
Statutory Instruments
The Donations to Charity by Individuals (Appropriate Declarations) (Amendment) Regulations 2005 (SI 2005/2790)
In force: 1 November 2005
Amends the Donations to Charity by Individuals (Appropriate Declarations) Regulations 2000 (SI 2000/2074), with the main effect that charities need not send donors a written record of their oral Gift Aid declarations, provided that the charity keeps a record of the declarations that can be audited by HM Revenue and Customs.
CASES
Richmond Housing Partnership Ltd v Brick Farm Management Ltd [2005] EWHC 1650 (QB); [2005] NPC 108.
Tenants holding long leases are not deprived of the right to collective enfranchisement under Part 1 Chapter 1 of the Leasehold Reform, Housing and Urban Development Act 1993 because the landlord is a charitable housing trust and lets out some flats in the block in pursuit of its charitable objects.
Church of England Children’s Society v Revenue & Customs Commissioners [2005] EWHC 1692 (Ch); [2005] STI 1340
The charity could recoverable input tax paid for goods and services used exclusively in the production and distribution of its newsletter, because the distribution of the newsletter to committed donors was the disposal of goods forming part of the assets under the Value Added Tax Act 1994 Sch.4 para.5(1) even though the distribution was not made for consideration.
Prize Provision Services Ltd v Revenue & Customs (EO00902) (2005), V&DTr (Manchester) 18 August 2005
Courts should apply common sense to decide whether a scheme is a lottery, or consists of fixed odds betting and is therefore liable to general betting duty under s1 of the Betting and Gaming Duties Act 1981. In this case a scheme, run for the benefit of several charities whereby entrants could win fixed amounts by stating what the temperature would be on certain days, was held to be a lottery.
Harwood v Harwood & Ors [2005] EWHC (Ch), 9 November 2005
A gift in a will of “the Harwood Collection” to the trustees for the charitable purpose of establishing a museum for the benefit of the public, where the will provided that the trustees should wind up the charity if the purposes could no longer be carried out, was held not to create a valid charitable trust due to uncertainty over what constituted the Collection. It was also held that the testator did not evince a paramount charitable intention, so that all his articles and chattels, which were of little artistic, literary or musical worth, fell into his residuary estate.
Fraser & Anor. v Canterbury Diocesan Board of Finance & Anor. [2005] UKHL 65, [2005] 3 WLR 964
The site of a school used for purposes within s 2 of the School Sites Act 1841 had not reverted more than 12 years before the Reverter of Sites Act 1987 came into force, even though the site had ceased to be used for the narrow purposes set out in the conveyance under the 1841 Act no later than 1947, but was used as a school with a general admissions policy until 1995. The question for the court was whether the school had ceased to be used for purposes within the 1841 Act, to which it should take a broad and practical approach, and the purposes stated in the grant were not relevant.
CHARITY COMMISSION (www.charity-commission.gov.uk)
Selected Press Releases
29 June 2005 – “COMMISSION SETS OUT GROUND RULES FOR PUBLIC SERVICE DELIVERY BY CHARITIES”
The Charity Commission has issued a policy statement concerning the delivery of public services by charities. The statement highlights key issues but takes a neutral position on the issue.
23 August 2005 – “CAMPAIGN LAUNCHED TO RECRUIT MORE TRUSTEES”
Information about the launch of “Get on Board”, a campaign to recruit more charity trustees.
9 September 2005 – “HOW ARE CHARITIES SPENDING THEIR MONEY? CHARITY FINANCES NOW OPEN TO INSTANT INSPECTION”
Charities’ accounts are now available to view on the Charity Commission’s website.
14 September 2005 – “CALLING THE COMMISSION JUST GOT CHEAPER”
The Charity Commission has today changed its main contact number to 0845 3000 218. Calls will now be charged at the local rate.
3 October 2005 – “COMMISSION SIGNALS START OF PUBLIC AFFAIRS ROLE”
The Charity Commission has appointed consultants to help create its strategy for its public affairs role.
13 October 2005 – “NEW ERA IN PUBLIC INFORMATION ABOUT CHARITIES AS REGULATOR RECEIVES FIRST SUMMARY INFORMATION RETURN ON LINE”
The Charity Commission’s system for receiving summary information returns on-line is now operational.
4 November 2005 – “THE TRUTH ABOUT CHARITY - RESEARCH SHOWS TRUST IN CHARITIES IS HIGH BUT NOT BASED ON KNOWLEDGE”
The Charity Commission’s research into what makes people trust charity shows that few people realise they have received money, support or help or that charity benefits three-quarters of the population.
Other Publications
June 2005 – “Policy Statement on Charities and Public Service Delivery”
July 2005 – RS10 “Start as you mean to go on: Trustee Recruitment and Induction”
July 2005 – “Public Benefit – The Charity Commission’s position on how public benefit is treated in the Charities Bill”
Winter 2005 – “Charity Commission News” Issue 23
REVENUE & CUSTOMS
Guidance
20 September 2005: HMRC Guidance on the new rules applying to Gift Aid on donations that attract a right of free admission to charity property.
1 November 2005: HMRC Guidance on the Donations to Charity by Individuals (Appropriate Declarations) (Amendment) Regulations 2005
NATIONAL COUNCIL FOR VOLUNTARY ORGANISATIONS
News
Why
do people give to charity - and why don't others?: 24 June 2005
Press release publicising research on patterns of giving.
UK
charities overturn European Parliament ban: 01 July 2005
Press release on the decision by the European Parliament not to restrict access to the Parliament to organisations permanently based in Brussels.
Press release publicising governance code to promote good governance in the voluntary sector and bring it into line with the private and public sectors.
NCVO backs Liberal Democrats' amendment to Lottery Bill: 29 July 2005
Press
release backing a proposed amendment to the Lottery Bill requiring
the Secretary of State to publish guidance as to the allocation of
funds.
UK voluntary organisations concerned over European Union draft regulations : 26 August 2005
Press
release expressing concerns about draft European Commission
regulations designed to combat the financing of terrorism and
criminal abuse through the non-profit sector.
Voluntary
and community sector calls for reduction in Lottery tax : 15
September 2005
Press release publicising calls by voluntary sector organisations to reduce the 12% tax on the National Lottery to 9% during the run up to the 2012 Olympics.
Press
release drawing attention to a new scheme that provides travel
bursaries for members of voluntary organisations to allow them to
learn from others that have traded successfully.
Guide
to the Freedom
of Information Act
A guide explaining how voluntary sector organisations can make full use of the Freedom of Information Act 2000. Available at:
http://www.ncvo-vol.org.uk/asp/search/ncvo/main.aspx?siteID=1&sID=18&subSID=383
Publications
Good Employment Guide for the Voluntary Sector (fourth edition) (July 2005)
Recruiting a New Chief Executive: A guide for trustees and chairs (July 2005)
Good Financial Management Guide (2005)
HOME OFFICE
Publications
The Home Office announces a new programme to provide strategic funding to organisations that can “provide representative and effective 'voice' for the voluntary and community sector (Active Community Unit - ACU) or inform and influence the national policy debate on volunteering and/or charitable giving (Volunteering and Charitable Giving Unit - VCGU) which are key to the Active Communities Directorate’s strategic objectives”.
15 October 2005 “Strengthening Partnerships: Next steps for Compact”
Consultation document and initial regulatory impact assessment on how to take the compact between the government and the voluntary sector further.
JOURNAL ARTICLES
Blueprint for change
New Law Journal (2005) Vol.155 No.7182 Supp (Charities Appeals Supplement Spring/Summer 2005) Pages 32, 34
24/6/2005
Kenneth Dibble (Charity Commission)
Discusses the Charity Commission's autumn 2004 strategic review of its service, and its consultation document, “Charity Working at the Heart of Society”.
Gift aid and the day membership scheme
New Law Journal (2005) Vol.155 No.7182 Supp (Charities Appeals Supplement Spring/Summer 2005) Pages 20, 22
24/6/2005
Jean Dollimore (Hempsons)
Examines the change to the Gift Aid rules regarding “day membership” schemes made by section 11 of the Finance (no 2) Act.
Regime change: new reporting rules for charities
New Law Journal (2005) Vol.155 No.7182 Supp (Charities Appeals Supplement Spring/Summer 2005) Pages 14, 16, 18
24/6/2005
Carol Sellwood and Nick Sladden (Baker Tilly)
Considers the various recent changes in the area of charity accounting.
Higher and further education update: Reforming the governance of higher and further education institutions
Education Law Journal (2005) Vol.6 No.3 Pages 207-210
01/07/2005-01/09/2005
Nicholas Saunders (Eversheds LLP)
An overview of amendments to the Charities Bill as they impact on higher and further education establishments.
Cross border giving
Tax Journal (2005) No.797 Pages 15-16
11/7/2005
William Hancock and Hannah Candlin (Speechly Bircham)
Examines tax questions arising from gifts to foreign charities and gifts to UK charities from the USA, and issues arising from the differences in the definition of charity in the current English and Scottish charities Bills.
Charitable status
Estates Gazette (2005) No.0538 Pages 138-139
24/9/2005
James McCallum (Russell-Cooke)
Explores issues relating to property transactions involving charities.
Did your foot fall off?
Taxation (2005) Vol.155 No.4027 Pages 717-718
29/9/2005
Keith Gordon
Considers changes to the income and corporation taxes legislation as they relate to charities.
