Earlier this week, the Charities Bill received Royal Assent, and passed into law as the Charities Act 2022.
This is a moment for celebration. We welcome the provisions of the legislation, which originated with recommendations from the Law Commission and are primarily aimed at making life easier for trustees, helping them maximise the benefits their charity delivers. While the changes are largely technical, they are designed to make a positive, practical difference to charities, and the Commission as regulator.
In a previous blog, I outlined the key changes and what they mean for charities.
As a quick reminder, and for example, the provisions make it more straightforward for charities to change their governing documents, grant more flexibility in using ‘permanent endowment funds’, allow greater flexibility around the advice needed when selling land, and allow trustees to be paid for goods provided to a charity in certain circumstances.
In summary, the changes aim to be largely enabling and empowering for trustees.
What happens next?
Royal Assent is not the end of the process for us – it marks the beginning of the next stage of hard work, as it now falls on the Commission to implement many of the legislative changes. Indeed, implementing the Charities Act is one of our business priorities in the year ahead.
We will not be able to make all of the necessary changes in one go - not least because some of the changes require secondary legislation and others changes to our systems and processes. We have developed a plan that will see us aiming to gradually implement the changes between now and the autumn of 2023 (not all the provisions though are dependent on the Commission and may be brought into force earlier).
What’s involved in implementing the Bill
We’re talking here about changes to our guidance for trustees, our desk guidance for case workers within the Commission, and some of our online digital services for charities. We will also need to make sure all relevant staff are trained on the changes.
Some of the changes are quite simple – such as updating some of our guidance; others require ongoing input from a range of technical experts within the Commission to ensure the final product is fit for purpose.
What charities can expect
You can read the implementation plan for the Charities Act 2022, which sets out an indicative timetable for when provisions in the Act are expected to come into force.
We will let charities know when each of the relevant provisions come into force and we have consequently updated certain pieces of guidance, or amended an online service.
We will also be clear about when the process has concluded – so when all the provisions that require changes from us have been implemented.
Comment by Roy Gregg posted on
If the changes mean that you will stop treating tiny charities as if they were Oxfam that really will be progress!
Comment by Tony Munro posted on
A good informative piece. It would be useful to also know if the Bill is proposed to cover all of the UK, or if it is to have limited effect.
Comment by Amanda Pashley posted on
This is a very positive development and much welcomed if it does in fact make it easier for charities.
Comment by Freda Parkes posted on
Will be very glad to see improved communication with charities. At the moment for us it is non existant.
Comment by Alan Clements posted on
If seeking to make life easier for the smaller charity and to avoid the complications of SORP for such charities, why cannot the threshold for R & P be increased to 500k ?
Comment by Helen Evans posted on
Please expedite the ability to borrow from permanent endowment. This will provide vital, immediate funding for charities with minimal implementation requirements.
Comment by Janet Nicks posted on
Thank you for updating smaller charities and keeping us up to date about these sweeping changes. It is really helpful to have summaries rather than having to wade through all the legislation at such a very busy time.
Comment by Eleanor Baker posted on
Have the revised regulations come into force regarding the requirement to seek a Charities Act surveyor’s report when selling charity land?
Comment by Alan Grahame posted on
When is the Charity Commission going to allow small charities to withhold their address from the public record? I am a trustee of a small charity and we define very carefully the sort of causes we will support. Nonetheless we are bombarded with junk mail from organizations, from the UK and abroad who we would never be able to support. We had to set up a PO Box as our address - based on the suggestion from someone at the CC - but that costs us over £350/yr. It is a terrible waste of money all round
Comment by Tim Thirst posted on
If it means that the Charities Commission will start to have an understanding of what Charities are, and what a volunteer really is, it will be a major improvement,
Comment by Phillip Noyes posted on
I hope your updated guidance will spell out what’s new - what is being implemented - rather than leave the reader to work it out….
Publishing a simple timeline of what’s planned to be implemented might help.
Comment by Emma posted on
Hi Phillip, an implementation plan has now been published that sets out an indicative timetable for when provisions are expected to come into force. https://www.gov.uk/guidance/charities-act-2022-implementation-plan
Comment by John Edwards posted on
What sort of changes to the governing document will be allowed?
Comment by Deb posted on
Hi John, the scope of changes which will be allowed isn’t changing, but the process for making changes and the classes of change which need Commission consent will change.
The full Act is due to be brought in over the course of the next 12-18 months and we will give updates as soon as we’re able. Kind regards, Debbie.
Comment by Karen Dodd posted on
If it makes life easier for the smaller charity then this is welcomed. I do not like being told how to spend money that is raised and having to tell people where, why, who, what and when I am meeting an official when I am travelling to my charity overseas. I feel that those who interrogate us can be condescending and have no idea of the reality of what we do but probably had an experience with an NGO staying in a 5 star hotel and not actually getting any practical work done. Jumping on the back of a motorcycle to get from A to B does not warrant a receipt in my opinion, especially when the rider is most probably illiterate.
Comment by Richard Stevens posted on
I applaud any step to diminish the administrative burden on charities ( and on humans everywhere) so that they can get on with their purpose.
But I suggest that the purpose of many small charities might be better served if prospective trustees first considered whether to add their efforts to an existing charity rather than starting a new one.
And the Commission out to dissuade the proliferation of 'duplicate' charities.
Comment by Jaki Florek posted on
FILING ACCOUNTS: I am sure that in past years, 2013 when we first registered and up to 2020, a charity could file annual accounts online by just uploading their year end accounts (signed by Trustees & by an independent examiner) and answering a few straightforward non-financial questions.
I don't remember having to pick it apart and insert answers into boxes on the financial content already (obviously!) included in the accounts.
When did it change?
There is a massive difference in keeping accurate records of income & expends (all fully evidenced) as management accounts, and the 20 page document prepared by a professional accountant.
Always checked & discussed of course, but there are complexities if for example, a charity owns its building and the renovation grant (it was totally derelict!) is included as restricted reserves with annual depreciation...
Wake up at the back there!