Managing director Gerrard Financial Consulting
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Charity compliance: Abuse, data protection & OTS

12th Jan 2017
Managing director Gerrard Financial Consulting
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It’s been a busy time in the world of charity compliance, with this month’s update covering a wide spectrum.

ICAEW charity manifesto launch

At their 2016 annual charities conference, the ICAEW launched its Charity Manifesto. The manifesto puts forward recommendations for trustees, (addressing issues key to) the Charity Commission and the government for better financial management of charities. Download the full document here.

Charity Commission launches consultation around 2017 annual return

Following a press release on 22 December 2016 the Charity Commission (for England & Wales) has launched a consultation around the 2017 annual return.

The consultation kicks off a two-year project to review the way in which the Commission collates charity data and seeks to address the following around whether:

  • Charities should keep the fundamental information up to date more regularly than annually
  • Questions should be focused to match the Commission’s strategic priorities and targeted at the relevant charities
  • The regulatory burden can be lifted by making sure the annual return is more targeted and proportionate

For more information, or to have your say, visit the dedicated consultation site here.

Tackling abuse and mismanagement - Charity Commission releases full report

On 20 December 2016 the Charity Commission (for England & Wales) published its annual report of compliance and investigatory work, highlighting poor governance as the key issue in the majority of cases. Highlighted examples include:

  • Acting outside of charitable objects
  • Lack of spend on charitable activity
  • Failure to implement proper separation between the charity and a trustee-connected private company
  • Double defaulters - charities that were in default of their statutory obligations to meet reporting requirements by failing to file their annual documents for two or more years in the last five years

A worthwhile reminder for our clients and quite possibly quote of the month; “the strategic vision, oversight and evaluation that a board of charity trustees should provide is not an ‘optional extra’ in a charity”. 

The full report can be read here.

Charity Commission Trustee Declaration Form

The Commission has recently updated this form (although it is still marked as a January 2016 version). The updated form includes new wording confirming the trustee is not “disqualified from being a trustee by an order of the Charity Commission under section 181A of the Charities Act 2011”. If a charity has modelled its own trustee declaration form on the Commission’s, they may wish to update their own forms.  

Regulators issue joint alert about data protection compliance

By way of a gentle reminder to charities that they must identify and comply with data protection laws and regulations, the Charity Commission (for England & Wales) has teamed up with the Fundraising Regulator to issue an alert to all charities.

With two charities recently being found in breach of data protection laws and facing financial penalties, the regulators have set out key steps that they expect trustees and charities to immediately take:

  • Immediately cease any activity without explicit consent described and set out by the ICO notices of 5 December 2016 (published 9 December 2016) as being in breach of data protection law
  • Review and assess activities in the areas of data collection, storage and use to ensure it is compliant with data protection law - this should include reviewing fair processing statements to ensure they are explicit, clear, transparent and highly visible
  • Review and assess current data governance systems and processes to ensure they are fit for purpose and evidence sufficient oversight, control, are operating and effective - this includes ensuring there is a clear framework of ownership and accountability in place
  • Where breaches are identified ensure you review the requirements for reporting to the ICO and comply - where a notification of breach is required to also submit a notification to the Commission under the reporting a serious incident process
  • Where breaches have occurred consider the risk to those whose data has been breached and any action required to mitigate risks to those individuals and their data - this should include notification to those affected if appropriate following a risk assessment by the data controller
  • Notify the Commission about any investigation of their charity by the Information Commissioner by reporting a serious incident

One to watch – OTS review 2017

The Government announced in the Autumn Statement that the Office of Tax Simplification (OTS) would be undertaking a review of VAT.  The terms of reference have now been published and they include the following which have a potential impact on the charity sector: 


  • The issues and impacts which would be involved if the VAT registration threshold were either higher or lower than at present;
  • The extent to which the definitions of the types of supply which are currently exempt from VAT, subject to a reduced rate or are zero-rated, fit the modern context, create complexity for businesses and administration;
  • The potential for simplifying the operation of partial exemption methodologies, the option to tax and the Capital Goods Scheme with a focus on the impact on smaller businesses;
  • The relative significance and impact of the issues identified on businesses of different sizes or in different sectors.


A call for evidence is expected in Spring 2017.   


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