Charities Act 2022
The Charities Bill received Royal Assent in February 2022 and passed into law as the Charities Act 2022. Its changes have been implemented in stages on 31 October 2022 and 14 June 2023. The final set of changes came into force on 7 March 2024. Charities should familiarise themselves with the latest changes, which include the following.
Making changes to governing documents
A new statutory power has been introduced, which allows trusts and unincorporated associations to make changes to their governing document. In doing so, they will need to have the Charity Commission’s authority for certain “regulated alternations”. See How to make changes to your charity’s governing document (CC36) for the new guidance
Selling, leasing, or otherwise disposing of charity land
Changes here include provisions for liquidators, provisional liquidators, receivers, mortgagees or administrators relating to disposals and taking out of mortgages. For more information about the new rules that apply to the selling, leasing, or otherwise disposing of charity land, read the Charity Commission’s CC28 Guidance.
Charity mergers
For certain mergers, new rules now allow most gifts to charities which merge to count as gifts to the charity they have merged with. See the new guidance.
Other provisions
The final phase of the Act’s rollout also enables The Charity Commission to:
- Authorise a trustee to receive or retain payment for work completed for the charity where the Commission decides it would be inequitable for a trustee not to be paid. See Trustee Expenses and Payments (CC11) for the latest guidance.
- Confirm defective or potentially defective trustee appointments. See Finding New Trustees (CC30)
Accepting, refusing and returning donations to your charity
The Charity Commission has recently issued guidance for accepting, refusing and returning donations made to your charity. A charity’s starting point should always be to accept a donation. Still, there may be occasions when you need to refuse or return a donation. For example, if the donation comes from an illegal source, or was not the donor’s property to give, or the donor lacked the mental ability to make the decision to donate.
The guidance stresses that the charity must give careful consideration before refusing or returning a donation. The decision should always focus on the charity’s best interests and purposes and not be swayed by personal views or external pressures. For more details, see the latest guidance: https://www.gov.uk/guidance/accepting-refusing-and-returning-donations-to-your-charity
Charities SORP FRS 102 (Third Edition)
The Financial Reporting Council (FRC) embarked on their next review of FRS 102 and published an Exposure Draft (FRED 82) in December 2022. This proposed some significant amendments to FRS 102, which were initially due to be effective for periods commencing on or after 1 January 2025. Based on that timetable, the new Charities SORP was expected in August 2024.
However, the FRC has now confirmed that they expect to issue the final amendments to FRS 102 in the first half of 2024 with an effective date not before 1 January 2026.
The new Charities SORP can only be finalised after the FRS 102 amendments have been issued and following a 3-month consultation period. This means the August 2024 deadline can no longer be met. Once the final version of FRS 102 has been published, an updated timetable for the new Charities SORP will be established.
CAN WE HELP?
If your Charity or Not-for-Profit organisation has questions or concerns about this latest guidance, please contact our specialist team. Their details are on the right of this page.
Specific advice should be obtained before taking action, or refraining from taking action, in relation to this summary. If you would like advice or further information, please speak to your usual Shipleys contact.
Copyright © Shipleys LLP 2024
Related Resources
