Correspondence

Charity Commission News: Issue 59

Published 9 January 2018

This correspondence was withdrawn on 20 October 2020

This document has been archived as it is over 2 years old.

Applies to England and Wales

Submitting your 2017 annual return

You will need to submit your annual return for 2016 before you can do the return for 2017. January is one of the busiest months for filing annual returns. Make sure you file early as possible to avoid any last minute rush.

We expect high demands for the annual return service and advise using it outside peak hours (10am to 3pm) to avoid any problems logging in.

Find out what you need to do to prepare and send your charity’s annual return.

Passwords for online services

When accessing our online services you’ll need to enter the charity registration number and the password.

Online services are used for tasks such as changing your governing document, submitting annual returns and changing charity details.

When you request a change of password it will be sent to the email address we have registered for your charity.

There will be one registered email address and password per charity - make sure you know who holds the information, and it is kept safe.

New Charity Commission safeguarding strategy clarifies trustees’ responsibilities

Safeguarding is a key governance priority for all charities, not just those working with groups traditionally considered at risk.

The Charity Commission safeguarding strategy explains that trustees should proactively safeguard and promote the well-being and welfare of their charity’s beneficiaries.

They must take reasonable steps to ensure that their beneficiaries or others who come into contact with their charity do not, as a result, come to harm.

In December we also published an alert advising charities to review safeguarding and governance arrangements.

Changes to automatic disqualification rules for trustees and senior manager positions coming soon

From 1 August 2018 changes to the rules mean there will be more restrictions on who can run a charity.

The current automatic disqualification rules only apply to trustees. They protect charities from being run by people who meet certain criteria or have specific unspent convictions and who are not authorised by a Charity Commission waiver to serve as a trustee.

The changes introduce new disqualification reasons, and will for the first time also stop disqualified people from being able to act in some charity senior manager positions. These will be Chief Executive (or equivalent) and Chief Finance Officer (or equivalent) positions.

If you will be disqualified when the new rules change on 1 August 2018, you can apply for a waiver of your disqualification using the application form that will be on our website from 1 February 2018.

Charities will need to update their recruitment checks to avoid appointing or retaining disqualified individuals as trustees or into senior manager positions.

The guidance explaining the new rules and the waiver form will be available on our website later this month (January 2018).

General Data Protection Regulation – new helpline for charities

From 25 May 2018, the General Data Protection Regulation (GDPR) will come into force. The GDPR applies to ‘controllers’ and ‘processors’ of data. It will also:

• strengthen rules around personal data

• place a duty on organisations to be more accountable and transparent

• give individuals greater control over their personal data

On the 1 November the Information Commissioners Office (ICO) opened a dedicated helpline for small businesses and charities, to help prepare you for the new law.

You can read more about the helpline and other resources available on the ICO website. We are advising all charities to check the ICO website regularly for updates, and follow all guidance issued by the ICO about GDPR.

Key Charity Commission guidance

The New Year is an ideal time to review your charity’s finances.

Our helpful guide, Charity Finance Essentials is a good place to start, while our guidance on internal financial controls includes a handy checklist for a financial review.

Commission listens to charities in making changes to the annual return for 2018

The Charity Commission has made a number of amendments to the content of the annual return for 2018 (AR18), after an extensive consultation with charities throughout the autumn.

In a consultation report published earlier this month, the regulator also says it is grateful for the positive and constructive engagement it has had with charities and that it has taken into account charities’ responses in making a number of key changes to the proposed content.

The Commission has also published the formal regulations underpinning the AR18 and is currently developing the digital service that will deliver AR18.

Charitable companies converting to charitable incorporated organisations (CIOs)

There will be a phased timetable allowing charitable companies to convert to charitable incorporated organisations (CIOs) following legislative changes in Parliament on 23 November 2017.

The new legislation means that all charitable incorporated organisations (CIOs) will also be listed on the Business names index, owned by Companies House.

The Secondary Legislation under the Charities Act 2011 contains 3 distinct elements:

• the Charitable Incorporated Organisations (Conversion) Regulations

• the Charitable Incorporated Organisations (Consequential Amendments) Order

• the Index of Company Names (Listed Bodies) (England and Wales) Order

We are now preparing a programme of work to support these changes. You can find out more in our guidance about converting charitable companies to CIOs.

Fraud awareness, cyber-attacks and protecting your charity

We recently updated our guidance to help you protect your charity from fraud.

This contains lots of useful advice, regulatory alerts and links to external sources to help you understand fraud and protect your charity. There are also several e-learning resources about different elements of fraud.

In December, Action Fraud opened a 24/7 live cyber-attack helpline. If you experience a live cyber-attack, this helpline gives access to specialist advisors who can offer advice and support to charities or other organisations in reporting the attack.

The reports are immediately sent to the National Fraud Intelligence Bureau (NFIB).

To prevent cyber criminals from operating, the NFIB will assess whether there are any websites, bank accounts or phone numbers that can be closed down.

New and improved Cyber Security Essentials scheme for charities

Trustees can now improve their cyber-security knowledge and test their charities’ resilience against best-practice standards, by visiting the government’s Cyber Essentials webpages.

The new National Cyber Security Centre (NCSC) has taken on overall responsibility for the UK’s cyber-security and has a dedicated Charity and Public Engagement team.

After feedback from users, they have simplified the Cyber Essentials scheme. This makes it easier to become certified if you are a beginner to understanding cyber-security.

You can take the test for free to help improve your cyber-security knowledge and take steps to protect your charity.

Charities will need a Legal Entity Identifier to trade in financial instruments

If your charity or trust trades in financial instruments new rules were introduced on 3 January 2018 that require you to get a Legal Entity Identifier (LEI).

If your charity or trust needs to hedge against foreign currency risks, or purchase equities or bonds to invest or generate an income stream these rules will affect you. If don’t act you may lose your ability to execute these trades in future.

More information about LEI is available on the Financial Conduct Authority (FCA) website. It has important information about who needs to get a LEI and whether you need to renew it on an annual basis (most charities and trusts won’t need to renew their LEI annually).

New simplified financial sanctions guidance for charities operating overseas

The Office of Financial Sanctions Implementation (OFSI) has produced new guidance to help you comply with financial sanctions designed to support UK foreign policy and national security.

OFSI works closely with charities, regulators and banks to understand common challenges faced by those operating in some of the most hostile environments.

The move was prompted by requests, notably from smaller charities, asking for clearer information on issues affecting the sector so they could make sure they complied.

More information and guidance to help you comply with financial sanctions is available on GOV.UK

New research shows that charities must do more to promote diversity on their boards

In November we published ground-breaking research into awareness and effectiveness of trusteeship in England and Wales.

It recommended that charities do more to promote diversity on their boards and encourage applications from women, young people and people from ethnic minority and socially diverse backgrounds.

The report was commissioned by the Office for Civil Society and the Charity Commission, and delivered by a consortium led by Cass Business School and the Cranfield Trust.

Some of the key findings included:

• 71% of charity chairs are men and 68% of charity treasurers are men

• the average age of trustees is 55-64 years – over half (51%) are retired

• 75% of trustees have household incomes above the national median

• 60% of trustees have a professional qualification – 30% have post-graduate qualifications

• 71% of trustees are recruited through an informal process

You can read our response and full findings of the research on GOV.UK. Read our guidance on finding new trustees.

Keeping in contact with the Charity Commission

Our contact centre is open 10am to 12noon and 1pm to 3pm, Monday to Friday on 0300 066 9197. We can help if you are experiencing technical problems with an annual return, a registration application or any of our online forms.

You can also sign up for GOV.UK alerts. This is the simplest way to keep up-to-date with the latest information we publish on our website. You’ll be asked for an email address to create a subscription, and can choose how often you’d like to be alerted.

It is also useful to follow us through our social media channels Twitter and LinkedIn. We regularly share important information and updates for the charity sector.