The Charities Act 2022

In February last year The Charities Act 2022 became law and with it a gradual implementation plan which is expected to last until Autumn 2023. To summarise those aspects most relevant for churches:

Changes which came into force on 31st October 2022:

(i) Charity Trustees can now be paid for providing goods and services in certain circumstances:

- Estate agency or computer consultancy services

- Services & associated goods e.g. plumbing,

decorating and any associated materials.

- Goods only e.g. supplying stationery to the charity.

Detailed guidance is available on Charity Commission CC11 Updated October 2022

(ii) Fund Raising Appeals that do not raise sufficient funds or which raise too much.

- Subject to certain conditions, the Trustees are now able to apply the funds raised for new purposes, rather than having to ask the Charity Commission for a cy-près scheme rather than returning the donations.

- Where the fund exceeds £1,000 Charity Commission consent will be required for the trustee resolution to take effect. If the fund is £1,000 or below, the administrative burden will be lifted, and Charity Commission consent is not required.

- Individual donations are small, £120 or less.

- Where the charity would incur unreasonable costs in returning the donations.

- Where donors cannot be found or identified.

- Donations are in cash or raised through a lottery or similar competition.

Changes Due Spring 2023 ( no date announced yet)

(i) Disposal of Charity Land

In summary, the Act simplifies somewhat the rules for property disposals, but in doing so increases the responsibility of charity trustees to satisfy themselves that appropriate appointments have been made, on a case by case basis.

The rules are being simplified as follows:

• A wider group of people can give advice, provided they have the appropriate skills

• The advice to be given is less prescriptive

• No prescribed advertising required.

(ii) Permanent Endowments

Currently smaller funds may amend their purposes or spend the whole permanent endowment, without Charity Commission consent provided:

• If amending the fund’s objects or merging it with another, the income is £10,000 or less; and

• If requiring to spend the permanent endowment – the fund must either have an income of £1,000 or capital value of £10,000.

The Charities Act 2022 is repealing these provisions.

- 280A of the Act provides for Charity Commission consent to all changes to funds with a capital value of £25,000 or more.

- Small funds, with an income of £10,000 or less that need to be reorganised or merged; and

Funds that are worth more than £25,000 but with an income of £1,000 or less will be much easier to spend now than after the changes.

Changes Anticipated Autumn 2023 – likely to affect Churches.

(i) Appointment of Trustees – The Charity Commission will have a new power enabling them to ratify the appointment or election of a trustee or where the appointment process is defective or where there is some uncertainty as to the validity of the appointment.

(ii) Charity Investment Policies– Following the judgement dated 29th April 2022 in the Case of Butler-Sloss v The Charity Commission, revised legal principles were established, which should govern the duties and powers of Charity Trustees as far as investments are concerned. The Charity Commission is currently reviewing Guidance Note cc14 and an update should follow in the Autumn.

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