Charities Act 2022 – some changes have now taken effect

From Monday 31st October 2022, the first set of changes came into effect by the Charities Act 2022. The provisions contained in the 2022 Act are being implemented gradually and there will be more to follow next year.

The Charity Commission say the 2022 Act has been designed to “make a positive, practical difference to charities and, where possible, to make things easier for trustees”

The new provisions which have just taken effect include:

A change to the statutory power whereby in certain circumstances, charities will now be able to pay trustees just for providing goods to the charity.

for charities to pay trustees for providing goods to the charity under certain circumstances.

In certain circumstances there is already a statutory power that charities can use to pay trustees for services beyond their usual trustee duties. Using this statutory power, charities can also pay for goods connected to that service.

This statutory power is changed by the Charities Act 2022 and the result is that, in certain circumstances, charities will now be able to pay trustees just for providing goods to the charity.

To clarify, the Commission guidance states that using the statutory power trustees could now be paid for:

o Services only, for example estate agency or computer consultancy
o Associated goods and services, for example plumbing or painting service and any associated materials such as plumbing parts or paint
o Goods only, for example supplying stationery to the charity

Before making any payments to trustees, please read the Charity Commission’s updated guidance: https://www.gov.uk/guidance/payments-to-charity-trustees-what-the-rules-are

A reduction in administration around fundraising appeals that raise too much or too little.

For all sorts of reasons, fundraising appeals sometimes raise more than anticipated or less (sometimes known as failed appeals) or circumstances may change which makes it impossible to spend the raised funds as intended. The 2022 Act aims to simplify the requirements when these situations arise.

Examples of the simplification include:

o The current requirement in some circumstances for charities to wait six months for donors to ask for a refund will no longer apply
o A simpler process will be put in place for obtaining Charity Commission authority; this will replace the need for the Commission to make a scheme
o If the donations that can be spent on new purposes (different to the purposes you raised them for) are less than £1000, trustees can act without the Commission’s involvement if they comply with the new legal requirements

The new guidance is available here: https://www.gov.uk/government/publications/charity-fundraising-appeals-for-specific-purposes

A new statutory power for Royal Charter charities

These charities, with the approval of the Privy Council, will now be able to change sections of their Royal Charter which they could not previously change.

More guidance is available here: https://www.gov.uk/guidance/royal-charter-charities

As well as the key changes outlined above, there are other provisions now in force and more are due to come into effect in the Spring of 2023.

The full legislation can be found here: https://www.legislation.gov.uk/ukpga/2022/6/contents/enacted