The new Charities Act: what you need to know

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This had its first reading in Parliament on 26/5/2021 and received Royal Assent on 24/2/2022.

There are a number of technical but important changes which are designed to allow Trustees to act more freely, maximise what the charity delivers and possibly save time and money when dealing with some procedures.

In no order of importance, the key points are:

  • Failed appeals have caused a headache for trustees when a target is not reached. The legislation means that a donation under £120 can be spent without having to go back to the donor.
  • Trustees have been given more flexibility to make use of permanent endowments (i.e. where the asset is supposed to be held forever). Up to 25% can be utilised without charity commission approval.
  • Land disposal has previously resulted in trustees seeking professional advice as per the stipulated requirements. This process is being made more straightforward, with a wider pool of professional advisors accessible which may save both time and money.
  • Governing documents can be more easily amended and will enable trustees to react to changing circumstances more easily and possibly in a more cost efficient manner
  • Trustees have been able to be paid for the supply of services if duly approved and authorised, but this has not until now extended to the supply of goods, which will now be allowed if it is in the best interests of the charity without requiring charity commission permission.

In addition to this legislation there is also the Dormant Assets Act 2022 which sets out an expansion of the Dormant Asset scheme in conjunction with the levelling up agenda. This has released £44 million for charities, social enterprises and vulnerable individuals with a further estimated £880 million due to be released in the future.

The emphasis therefore seems to be on allowing Trustees to act in the best interests of the charities, as they always have done, but with a little less tape than before.

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