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Charities and "not-for-profits" - VAT charge on admission fees
The reported High Court decision will indeed disappoint many charities and other "not-for-profit" entities. However, they should look carefully at the detailed law report to see how the decision does or does not impact on their own circumstances - and of course take expert specialist advice!
The key issue in the BSO case seems to have been that one of its trustees is a paid member of its staff (ie exceptional permission or authority exists permitting an employee to serve on its board).
For charities, the issue of paid trustees is a very important and potentially dangerous area. It remains the case that in general the law bans payments and benefits of any substance to trustees and requires trusteeship to be undertaken voluntarily. Exceptions to that remain rare rather than the norm and require specific advance authority - from the charity's own constitution or by special concession granted by the Charity Commission.
If a charity makes payments that are NOT authorised, all its trustees can be at risk of personal liability for breach of trust (regardless of the legal form of the particular charity). Innocent mistakes and misunderstandings can lead to that risk - for instance a mistaken belief that an "honoraria" is not a payment or that all that is required is the trustee in question abstaining from voting on the matter!
Cecile Gillard, Head of Charities and Voluntary Sector Department, Jordans Limited