The Charity Commission now enters a process of implementing the legislative changes, which it describes as one of its business priorities for 2022. The gradual implementation process is expected to last until autumn 2023 and involves updating Charity Commission guidance, both for trustees and for their own staff. The Commission’s implementation plan is now available and the first provisions of the Act are expected to come into force in autumn 2022.
Here is a summary of the headlines and what they will mean for your charity:
- More flexibility to make ‘ex gratia’ payments: ‘ex gratia’ payments are currently subject to strict rules which will be relaxed so that certain small ‘ex gratia’ payments, where a moral obligation can be demonstrated, will no longer require Charity Commission approval. This is expected to be implemented in autumn 2022.
- Paying their trustees for goods in certain circumstances: trustees will be able to be paid for goods provided to a charity in certain circumstances, even if not expressly stated in the charity’s governing document (currently trustees can only be paid for supply of services). This is expected to be implemented in autumn 2022.
- Access a wider range of professional advisers on the sale of land: charities will have access to a much wider pool of professional advisors on land disposal, and to more straightforward rules on what advice they must receive. This is expected to be implemented in spring 2023.
- Using a permanent endowment more flexibly: most legal restrictions on how charities can use permanent endowments stay in place, but there will be more flexibility in some areas. This is expected to be implemented in spring 2023.
- Amending the charity’s governing document: most charities will be able to amend their governing documents or Royal Charters more easily – remaining subject to the Commission and the Privy Council’s approval in certain circumstances, such as where changes to the charity’s objects are proposed. This is expected to be implemented in autumn 2023.
Elizabeth Jones, Partner at Farrer & Co, recently presented a webinar on the Practical application of the Charities Act 2022 for members of our Volunteering Community, where she explained how the Charities Act 2022 impacts charities and their trustees. You can find the recording of this and other webinars in the Community’s Library of Webinar Recordings.
For more information, please read the Charity Commission’s update Charities Bill: the next steps and click here to access the full Charities Act 2022.