What is the Charities Act 2022?
The Charities Act 2022 amends the Charities Act 2011 and will make several useful changes to charity legislation which will make life a little easier for charity trustees and senior managers in a wide range of charity law compliance areas.
Further details of the changes being brought in can be found here.
How are the changes being rolled out?
The Act is being implemented in stages. Some, but not all, of the changes the Act will make to the Charities Act 2011 come into force today - 14 June 2023. It feels like we have been talking about them for a long time but from today the following changes around use of permanent endowment, selling, leasing or disposing of charity land, the enhanced powers of the Charity Commission around charity names, come into effect.
There will still be further changes to come at the end of this year but below we look at the key points around the changes which will affect charities from today.
Disposal of charity land
The changes to the Act simplify some of the legal requirements charities have to fulfil when dealing with the disposal of land. These include:
• Introduction of a wider group of people who can act as a designated adviser to provide the trustees with the required advice report on certain disposals - including fellows of the National Association of Estate Agents or the Central Association for Agricultural Valuers;
• Confirmation that a trustee, officer or employee can provide the required report where they meet the necessary professional requirements;
• Providing greater discretion to the trustees around advertising land for disposal;
• Removal of the need for consent from the Charity Commission to short-term residential leases to employees.
The Charity Commission’s guidance CC28 has been updated to reflect the changes and can be found here: https://www.gov.uk/guidance/charities-act-2022-guidance-for-charities
These provisions allow the Charity Commission to not only direct a charity to change its name if it is too similar to that of another, is misleading or offensive, but extends that to any working name the charity might use on a day-to-day basis. It also introduces powers to delay registration of a charity or change of name where it considers it unsuitable and extends these powers to exempt charities.
Use of Permanent Endowment
From today, Charities will have new statutory powers which will provide greater flexibility around how permanent endowment funds can be used.
In certain circumstances, charities may now expend the capital of permanent endowment funds with a value of less than £25,000 without the need for consent from the Charity Commission. Further, certain charities may now borrow up to 25% of the value of their permanent endowment fund without Charity Commission consent.
Will the changes require charities to take any action?
The changes brought in today do not require charities to take immediate action, but trustees need to be aware of and comply with the revised rules in relation to any ongoing or proposed sales, leases or other disposals of land, or where the trustees are considering seeking additional flexibility over the use of permanent endowment funds.
As always, we would recommend taking the appropriate professional advice on any course of action you as a charity may be considering. We would be pleased to hear from you to discuss how we may be able to help.
Find out more
If you have any questions related to the recent changes brought in by the Charities Act 2022 or for further information about how our dedicated Charities lawyers can help, contact them today, or visit their hub page.