Opinion

What should charities expect from 2020

4th February 2020

What should charities expect from 2020

2020 is shaping up to be an eventful year in the charity sector, and here Ellie Williams of the Charity and Not for Profit team and Laura Horton, a trainee in the Private Client team, take a look at what issues and changes the sector may be facing in 2020. 

  • Following the Queen’s speech at the end of the year, we gained an insight into the government's intention to carry out a ‘fundamental review’ of business rates. No proposals have been made yet to make any changes to the generous relief from business rates on properties occupied for charitable purposes, but it is something for us to keep a look out for. 
  • As announced in 2019, the EU’s Fifth Money Laundering Directive is widening the obligation to register trusts with HMRC’s Trust Registration Service to all express trusts which means that all charitable trusts (not just those which incur a tax liability) could be caught by this obligation.  It is reported that the Government will publish its response in early 2020 to HM Treasury’s consultation paper, which was published back in April 2019. Hopefully this will shed some light on which trusts will have to be registered. 
  • At the end of 2019 a consultation was launched to gather the sector’s views on improving the Charity Governance Code. The consultation will close on 28th February 2020 and the new Code is due to be published this summer. It is proposed as a ‘light refresh’ of the Code, with more significant changes set for 2023. 
  • The Charity Commission has issued new guidance on when to report serious incidents involving a charity’s partners. Moving forwards, charities need to ensure that their trustees and senior management teams are briefed on this new guidance and proper procedures are in place within their organisation for reporting incidents. 
  • The Fundraising Regulator’s annual report and accounts made interesting reading.  Currently only around 20 charities refuse to pay the optional levy to the Financial Regulator. Interestingly an additional 100 charities do not reply to repeated requests. Payment of the levy amounted to £2.17m.  It has been reported that further changes may be made to the levy system, but we will have to wait for an update in 2020. 
  • The Financial Regulator has also confirmed that following a fall in usage, they will be reviewing the Fundraising Preference Service this year, including considering whether the system will continue beyond 2021. 
  • A recent report acts as a reminder that charity trustees should ensure they carefully minute decisions and the reasons why decisions were reached. Marie Stopes International trustees were recently criticised for inadequately documenting a CEO pay decision by the Charity Commission. 
  • The High Court heard its first case pursued by the Charity Commission where trustees were found guilty of contempt of court. The Charity Commission had opened an inquiry into the charity and it had failed to comply with a direction to provide information and documents about the charity. 
  • A recent landmark court case has ruled that NHS trusts were not charitable for the purposes of business rates relief and, therefore, did not qualify for the charities business rates relief on the properties they occupy.  There was a lot at stake for both the parties and the decision may yet be appealed. 
  • Following recent changes, prior written approval must be obtained from Companies House to use sensitive words in a CIOs name where a charitable company is commenting to a CIO. This applies even if the company has already obtained written approval for their existing name. 
  • And finally, it is expected that the constant growth and changes in technology will continue to impact the charity sector. With charities seeing a massive decline in street giving and the increase in smartphones, several charities have decided to introduce more innovative ways of securing donations, including contactless payment systems.

 

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