Notice

Companies and the EU referendum period

Published 15 April 2016

This notice was withdrawn on 30 January 2020

This guidance is now out of date.

Introduction

The Cabinet Office has produced this document in response to increasing queries from businesses about what they can do in the 10 week referendum period. The Cabinet Office, like the Electoral Commission, believes it is important that companies understand the rules as they apply to them. The Electoral Commission has produced guidance which companies should also refer to.

In the 10 week period before the EU referendum on 23 June, companies and other organisations can undertake activities up to a total cost limit of £10,000 over the 10 week period, not including staff costs; or £700,000 if the organisation registers as a permitted participant with the Electoral Commission. These limits apply to ‘referendum expenditure’ which is spending in connection with ‘promoting or procuring’ a particular outcome in the referendum and is regulated by the Electoral Commission. If part of an activity is caught by the rules and part is not, then not all the costs will be referendum expenditure. Costs can be split, in line with Electoral Commission guidance.

Many companies see it as one of their responsibilities to outline for staff, clients or shareholders what the outcome of the referendum may mean for them. Some companies may also want to go further and positively advocate a certain position in the referendum to staff, clients, shareholders or publicly. This document answers some of the typical questions that we have been asked by companies who wish to undertake these important activities without reaching the threshold for registering as a permitted participant.

The document should be read in conjunction with Electoral Commission’s guidance on the referendum and related spending rules and limits, Guidance for campaigners for the referendum on the United Kingdom’s membership of the European Union. The rules and limits are set out in the Political Parties, Elections and Referendums Act 2000 and the EU Referendum Act 2015. Companies are of course responsible for their own legal position, including in relation to other relevant legislation and must make their own judgement about the rules.

As Chief Executive, can I communicate with my staff setting out my company’s views on the referendum?

Yes you can. Communicating with staff by e-mail or intranet message is unlikely to incur significant costs, since staff costs are explicitly excluded from the spending limits in the legislation. If you do incur costs of more than £10,000 then it will still only qualify as referendum expenditure if the communication actually promotes a particular outcome in the referendum.

A communication that simply sets out in an objective and factual way the risks and benefits for your company of remaining in or leaving the European Union should not qualify. This is true even if you want to make clear that the risks or benefits weigh more on one side than the other.

Can I set out my company’s views on the referendum question by writing an article or letter to the press for publication, or by giving an interview on radio or TV?

Yes. This should not involve referendum expenditure, as there is a special exception for publications (other than adverts) in newspapers and periodicals, and in broadcasts made by the BBC, SPC and licensed broadcasters.

The costs of hosting a press conference would be referendum expenditure if it promotes a particular outcome in the referendum.

Can I write about the benefits/risks to my company of remaining in or leaving the European Union in my annual report?

Yes. Many companies in fact have a clear fiduciary obligation to publish information on risks, and the referendum legislation does not override this.

If you wish to outline, in an objective and factual way, the risks or benefits to your company of remaining in or leaving the European Union or to the sectors in which your company operates, this should not count as referendum expenditure. There is no reason, should you do this in your annual report, for the costs of the annual report to count as referendum expenditure.

Can I say whether I think the United Kingdom should remain in or leave the EU in my annual report?

Yes, you can do this too. If you express a clear company view on the referendum question in your annual report and accounts, in a way that seeks to influence voting at the referendum, this does mean that you are likely to have incurred some referendum expenditure. It does not mean the whole cost of the annual report is counted. The Electoral Commission provides guidance on ‘splitting’ of costs. If most of your annual report concerns other matters then most of the costs of it will not be referendum expenditure.

Can I discuss questions about the decision to remain in or leave the European Union in my Annual General Meeting (AGM)?

Yes. The implications for businesses of a decision to remain in or leave the European Union are significant, and customers, clients and shareholders will no doubt expect companies to be thinking about these in a transparent and detailed way.

The benefits or risks of remaining in or leaving the European Union are therefore likely to be a significant consideration for companies, and something that they may well want to discuss at their AGMs. If the AGM covers the risks and benefits to the company of remaining in or leaving the European Union, addressed in an objective and factual way, then it relates to the company’s business concerns and should not count as referendum expenditure.

If you wish to use your AGM to articulate a positive company preference on whether the United Kingdom should remain in or leave the European Union, then you might have incurred referendum expenditure. This does not mean that the entire costs of the AGM qualify as referendum expenditure. Much of the cost of your AGM will clearly relate to other business, so it is unlikely the £10,000 threshold will have been exceeded. If it is not exceeded then you will not need to register as a permitted participant.

What if I am asked my view of the referendum question at the AGM? Can I answer it?

Yes. If a company CEO is asked an unprompted question at his or her AGM about the company’s views on the referendum question, he or she should be able to answer this. It should not mean that the company has then incurred referendum expenditure. The same would apply if the CEO were asked about his or her personal opinion.

Financial services: can I advise clients what the implications are of remaining in or leaving the European Union for the UK economy, equity markets, the pound etc?

Yes. Your advice to clients will not qualify as referendum expenditure. This is because it is professional advice to clients, not information targeted at voters to promote or procure a particular outcome.

Can I publish research on the implications of remaining in or leaving the European Union?

Yes. If you wish to publish a research report on the implications of the UK’s remaining in or leaving the EU, based on evidence and analysis and set out in an objective and factual way, and directed at clients or a professional or academic audience, this should not be referendum expenditure. This is true even if the risks or benefits weigh more on one side than the other.

If you wish to use the document to influence voting in the referendum, for example by saying which outcome is to be preferred, or promoting the research in the media intending to influence voting then the costs of the report are likely to count towards spending limits. You will need to assess whether the production of the whole document is referendum expenditure, or only part of it; for example if other matters are dealt with in the report. Normal staff costs are excluded, so these would be the costs beyond these eg if you plan to print and distribute rather than email the report.

I want to host a government minister at my company during the 10 week referendum period on another subject matter. Can I?

Yes. The costs of the event will not qualify as referendum expenditure. If the minister is asked his or her view of the referendum question while visiting your company, they can answer this without it implying that the whole cost of the event now qualifies as referendum expenditure.

I want to host a government minister for a visit to my company during the 10 week period, in connection with the referendum. Can I?

Yes, and they are also able to address employees. If you host a government minister at your company during the 10 week period, and the visit is in connection with promoting a particular outcome at the referendum, the costs that you incur will qualify as referendum expenditure, so you will need to assess these. If the costs you incur are below £10,000 for the whole 10 week period, you will not need to register as a permitted participant with the Electoral Commission. If the visit is a mixture of a campaigning and official engagement, costs can be split in line with Electoral Commission guidance.

In calculating the costs:

• staff costs, ie the ordinary pay and allowances of your staff, are specifically excluded, whether that is staff taking time out of work to listen, or staff assisting in planning the event or working on a document
• venue costs, when the premises are owned by the company will not normally be included
• those met by the department of the government minister for the purposes of the minister’s visit would not be included

The sorts of costs that would typically count might include:

• catering
• production of bespoke branding or printed materials by the company in support of the event
• hire of external equipment by the company
• external venue hire
• external transport hire

Can I host the visit of a representative from one of the designated campaigns during the 10 week period?

Yes. In this case the visit would be in connection with promoting a particular outcome and incur costs towards the spending limits, and similar considerations about calculating the costs would apply.

Can I use my company site to host a public meeting on the referendum?

Yes. You do not need to register as long as the costs of the event (together with any other referendum expenditure in the 10 week period) are under the £10,000 threshold, bearing in mind the exclusions set out above.

Note that the rules would only apply if you wish to host a public meeting promoting one side of the referendum debate and not the other. Alternatively, if you invited both sides of the campaign to participate in an equal way, the rules would not apply.

Can I host an industry event at my company at which the referendum will be one of the subjects discussed?

Yes. Many industry groups and bodies will want to discuss the implications of the referendum given its importance for the United Kingdom. The legislation is not intended to prevent industries thinking collectively about important implications for their business or sectors. If your industry event is to discuss, in a factual and objective way, what the risks and benefits are for your companies, clients and sectors of remaining in or leaving the European Union, the costs should not be referendum expenditure.

If part of your industry event involves advocacy for a particular referendum outcome, for example speakers who plan to advocate in the meeting a particular outcome on the question of whether the United Kingdom should remain in the European Union without similar and equal advocacy on the other side, then the costs are likely to constitute referendum expenditure. You will then need to assess whether the whole event is a referendum cost, or only part of the event, for example if other matters were discussed, and to ensure these costs are within spending limits.