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Charity trustees: new disqualification rules

Don’t fall foul of new charity trustee disqualification rules, even if you are acting as a volunteer, warns Julia Penny.

Julia Penny

October 2018

New rules became effective from 1 August 2018 which mean that if any of the reasons set out in legislation apply (see below), an individual will automatically be disqualified from being a charity trustee or senior manager (eg, chief executive , chief financial officer or someone fulfilling these functions).

The reasons that cause disqualification are set out in a table and include the following types of issues:

Unspent convictions or similar issues in respect of:

  • Any offence involving dishonesty/perjury/contempt of court
  • Terrorism offences/being a designated person under anti-terrorism legislation
  • Bribery or money laundering offences
  • Contravening/disobeying a Charity Commission Order or Direction
  • Misconduct in public office
  • Aiding or abetting any of the above
  • Being on the sex offenders register
  • Being a person removed from a relevant office (eg, as charity trustee)
  • Being disqualified from acting as a director

Financial reasons:

  • Being an undischarged bankrupt or subject to certain other insolvency proceedings.

If a person acts as a charity trustee or senior manager while disqualified they are committing an offence. However, it is possible to apply to the Charity Commission for a waiver so that you can continue to act for a particular named charity, but you must not act while waiting for a decision.

The rules currently only apply to charities based in England and Wales and further guidance is available here including a helpful flowchart to determine whether or not you count as senior management. Note that although these will usually be paid positions it is possible to fulfil this role as a volunteer if you are in charge of the charity’s finances or the overall running of the charity. However, there will usually be only one or two senior management positions, such as the CEO and the CFO, plus any trustees who are affected by this legislation.<

Acting while disqualified is a serious issue, so take care to ensure that any of the charities with which you may be involved understand the rules and explain them carefully to senior management and trustees.

Julia Penny FCA is London ICAEW Council Member and Technical Director at SWAT UK @JSPenny

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