19 May 2010

Update on the implementation of the Charities Act 2006

The Implementation Plan for the Charities Act 2010 has been updated providing more information on when those provisions in the Act not yet implemented are expected to come into force.

Charitable Incorporated Organisations

The provisions relating to Charitable Incorporated Organisations (‘CIOs’) will not be implemented until the next Parliamentary session. Feedback on the Office of the Third Sector’s (‘OTS’) consultation on CIOs was published in September 2009 but the OTS states there is now insufficient time for the provisions to be implemented during the current parliamentary session. It now expects the CIO will not be available for charities until the beginning of 2011. It will be interesting to see whether the new coalition government brings this date forward given the relatively uncontroversial nature of the proposal.

Exempt charities

On 1 June 2010 certain charities currently exempt from registration with the Charity Commission will become excepted charities and be required to register with the Charity Commission if their gross annual income exceeds £100,000.

The list includes Student Unions in England and Wales; the Oxford, Cambridge and Durham University colleges and The Church Commissioners and institutions administered by them.

Other groups of exempt charities will have their principal regulator assigned to them on 1 June 2010:

  • Universities in England will be regulated by the Higher Education Funding Council for England
  • Certain national museums and galleries will be regulated by the Secretary of State for Culture, Media and Sport

Further implementation of provisions in the Act in relation to other groups of exempt charities is scheduled for early 2011. These will relate to charities whose nominated principal regulators are not yet ready to take on the role or where there are other issues involved with the conversion and include Charitable Industrial and Provident Societies (other than registered social landlords) and Further Education Corporations.

Foundation and Voluntary Schools lost exempt status in January 2009 but transitional provisions have meant that they have in effect continued to be treated as exempt charities. It is now proposed that they will have exempt status re-conferred on them, with the Secretary of State for Children, Schools and Families appointed as their principal regulator in England (and the Welsh Assembly Government as the principal regulator of those in Wales). The Office of the Third Sector is inviting views on these proposals – visit the Third Sector websitefor more information.

Public charitable collections

The licensing regime for public charitable collections provided for in the Act will not come into force until the OTS has finished assessing the research it commissioned in 2009 on the costs and benefits of the new regime and how the regime may be implemented in a cost-effective way. No specific timescale has yet been provided and we remain increasingly sceptical that the provisions in the Act relating to public collections will ever be implemented.

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