A summary of some of the most important developments in the UK charity sector in 2014. IBB's charities team has created a newsletter with the key charity law issues of 2014 which will continue to influence the sector throughout 2015. For charity law and social enterprise law advice contact IBB's charity solicitors. Based in west London, they provide advice and charity law guides for charities and social enterprises throughout England. For charity law advice see http://www.ibblaw.co.uk/service/charities/service-overview For advice on trustee training and responsibilities see http://www.ibblaw.co.uk/service/charities/trustee-training For charity or social enterprise registration see: http://www.ibblaw.co.uk/service/charities/charity-registration

1. I am really looking forward to the Christmas break this year. The past few months have been very intense,
as I have been juggling work and chairing the Charity Law Association’s response to the Draft Protection of
Charities Bill.
As we pause to reflect on the past few months, we include here a summary of some of the most important
developments in the charity sector. As always, if you would like to know more, please do get in touch.
Wishing you all a good break, and hope to see many of you at our annual update seminar on 20 January
2015.
Jo Coleman and all the team at IBB Solicitors
 charities@ibblaw.co.uk |  08456 381381 | U @CharityNotesUK
Charities team newsletter: December 2014
The proposed new legislation will
extend the powers of the Charity
Commission, with the aim of protecting
charities from abuse and malpractice.
The principal changes include new
powers to: ban individuals with certain
criminal convictions from becoming
trustees; disqualify those deemed unfit
to act as trustees; and issue warnings
to or wind up charities (depending
on the seriousness of the case) after
making inquiries into misconduct or
mismanagement.
The Charity Commission has welcomed
the Bill but is concerned that there is no
power to prevent individuals who have
been disqualified as trustees from taking
up other senior (non-trustee) roles in
other charities. Moreover the Charity
Commission cannot address breaches
before they occur by directing trustees
not to take specific actions.
A Committee has been tasked with
considering the Bill which includes
former Minister for Civil Society Nick
Hurd MP. IBB Charities Partner Jo
Coleman, as a member of the Charity
Law Association Executive Committee,
has given evidence to the Committee
at the House of Lords on the possible
impact of the Bill.
Government publishes Draft Protection of Charities Bill
http://bit.ly/1qVq7Zy
A recent decision of the Employment
Tribunal means that all hours worked
in overtime will need to be taken
into account when calculating an
employee’s holiday pay. Previously,
holiday pay was calculated only on
normal working hours, no matter how
many additional hours an employee
may have worked. Holiday pay will now
have to be increased if an employee
works additional hours.
Permission has been granted for an
appeal, but it seems unlikely that the
new holiday pay concept will be wholly
overturned. Charities whose employees
work overtime need to take this change
into account when calculating holiday
pay going forward.
More information: http://bit.ly/1rUuvJ7
Employment Appeal Tribunal decision changes way in which
holiday pay will be calculated.

2.  charities@ibblaw.co.uk |  08456 381381 | U @CharityNotesUK
The European Parliament has made
several amendments to the European
Commission’s original General Data
Protection Regulation. The principal
change is that consent will not be
needed to process data if that data is
“pseudonymous” (i.e. data which cannot
be linked to an individual – e.g. a phone
number without a name) or for direct
mailing.
In addition consent will not be required
if the use of the personal data meets the
data subject’s ‘reasonable expectations’
based on his or her relationship with
the data controller. This may have an
impact on the way in which you interact
with your donors and use professional
fundraisers.
The Regulation still has to pass through
the Council of Ministers and it is not
expected to come into force until 2017.
Changes to the draft EU Data Protection Legislation
Following the resignation of Brooks
Newmark, Conservative MP Rob
Wilson has been appointed as the new
minister for Civil Society. Rob Wilson
has previously been been in favour of
increasing restrictions on campaigning
by charities during elections. He has also
declared his support for small charities,
stating ‘I hope I can do more in the
months to come for small charities’.
Rob Wilson MP is appointed as the new minister for
Civil Society
Following its recent consultation, the
Charity Commission has announced that
three new questions will be included in
your Annual Returns for 2015:
• How much total of your total
expenditure has been on
campaigning activities?
• In the reporting period how much
income did you receive from:
- Contracts from central or local
government to deliver services?
- Grants from central or local
government?
• Has your charity reviewed its
financial controls during the
reporting period?
The Charity Commission is expected
to release guidance on how to answer
these questions at a later date.
Charity Commission announces changes to the
2015 Annual Return
The Institute of Chartered Accountants in
England and Wales’s guidance clarifies
that a trading subsidiary is not permitted
to pay its parent charity a greater sum
in Gift Aid than it has profits for its
accounting purposes in each year. It is
understood that a charity will be liable
to repay any payment made to it from its
trading subsidiary in excess of its profits
over the last six years. We are awaiting
clarification from HMRC as to whether it
will only demand this repayment if the
distribution to the charity was made
dishonestly.
ICAEW releases guidance on donations to a charity from its
trading subsidiary

3. Any charity employing the services of a
direct mailing company must now pay
VAT at 20% as opposed to the previous
zero rate. HMRC may request backdated
payments from direct mail suppliers
for up to four years which, depending
on the agreement in place, they may
be able to demand from their charity
clients.
The Charity Tax Group has said that
HMRC’s interpretation of the law is
incorrect and is continuing to push for
the decision to be reversed and the zero
rate reinstated. HMRC are expected to
publish further guidance on this in the
near future.
 charities@ibblaw.co.uk |  08456 381381 | U @CharityNotesUK
HMRC confirms that charities must pay VAT on direct mail
The Lobbying Act (“the Act”) requires
“non-party campaigners”, which include
charities, to register with the Electoral
Commission if they spend in excess of
the specific thresholds on regulated
campaigning activities between 19
September and 7 May 2015 – being the
regulated period in the run-up to the
general election.
Activities are regulated if they satisfy
a ‘purpose test’ and a ‘public test’: a
campaign may be regulated if can be
regarded as intended to influence voters
(i.e. purpose) and whether it is available
to the public or a section of the public (i.e.
public).
If you are unsure as to whether you may
need to register, or would like any advice
on political campaigning, please contact
Jo Coleman or Eva Abeles.
The Lobbying Act 2014 came into force on 19 September 2014
The Charity Commission has announced
that any concerns involving political
charity campaigning reported to it will
be reviewed as a priority and any issues
arising from it will be dealt with swiftly.
Furthermore, the Commission has
indicated that any conclusions reached
will be evaluated after the election and
reviewed with the intention of updating its
guidance on Political Campaigning (CC9)
should it be considered necessary to do
so.
The Charity Commission has set up a rapid response case
handling system in the run-up to the election
HMRC has released the results of its
research into the relationship between gift
aid and donors and how to increase the
numbers claiming gift aid.
Key findings include:
• Donors often misunderstood gift aid;
and
• Refusal by donors to claim gift aid
often stemmed from a belief that
there would be a cost to the charity or
themselves if they did so, as well as a
reluctance to share personal contact
information.
Conclusions reached include that in order
to secure higher levels of gift aid reclaim,
donors needed to be educated on what
gift aid is and the form to complete in
order to claim gift aid needs to be simpler.
HMRC has published an infographic
to explain to charities why they should
register for gift aid.
HMRC publishes research on Gift Aid and donor behaviour

4. The Charity Commission is consulting
on a draft updated Essential Trustee
Guidance (CC3). The purpose of the new
guidance is to make it clearer that the
Charity Commission expects trustees to
comply with good practice. Jane Hobson,
head of policy at the Charity Commission
commented that “It’s a case of trustees
understanding that ‘should’ means ‘really
should’ – not ‘maybe, if you feel like it”. If
trustees do not follow the specified good
practice, they may be in breach of their
legal duties and held responsible for any
loss the charity incurs.
The Charity Commission is keen to
receive comments on any aspect of
the draft guidance and have outlined
specific questions they would welcome
comments on.
Respond to consultation
(closes 17 February 2015)
 charities@ibblaw.co.uk |  08456 381381 | U @CharityNotesUK
Charity Commission launches consultation on updated
guidance for trustees
HMRC is leading the process to
introduce a single portal through which
charities could register at the Charity
Commission and HMRC simultaneously.
It was hoped that this would go live in
2015, but it is now unlikely to happen
before 2016.
Joint registration process between the Charity Commission
and HMRC has been delayed until 2016
The revised code introduces a new
standard for those fundraising from
people who are in “vulnerable”
circumstances. In particular, fundraisers
must ‘take into account the needs of
any potential donor who may be in
vulnerable circumstances or requires
additional care and support to make an
informed decision’.
This is more extensive than the previous
rule that you must ‘communicate
appropriately’ with vulnerable people.
Updated code of fundraising practice
Specific guidance on fundraising from
people in vulnerable circumstances
The Institute of Fundraising has updated its fundraising code
in relation to people in vulnerable circumstances
Chambers and Partners noted that IBB
‘understands the layperson very well’,
and that the team was ‘very competent,
understood our instructions and were
very thorough’.
Jo Coleman was described as
‘painstaking in the work she does’ and
providing ‘sound and practical’ charity
law advice.
We would like to thank all our clients who
took the time to speak to the Chambers
& Partners researchers about our team in
such positive terms.
Chambers & Partners ranked Jo Coleman in the top band of
national charity lawyers and the charities team has been
ranked in band 4, nationally

5. IBB’s charities team and Kingston Smith
will be giving their annual update on
issues affecting charities.
Tuesday 20 January 2014
IBB Solicitors
30 Windsor Street
Capital Court
Uxbridge
UB8 1AB
To register, please contact:
kiki.panesar@ibblaw.co.uk
01895 207248
 charities@ibblaw.co.uk |  08456 381381 | U @CharityNotesUK
Annual charity update seminar
Jo Coleman
Partner
01895 207809
jo.coleman@ibblaw.co.uk
Contact IBB Solicitors charities team
Eva Abeles
Senior solicitor
01895 207964
eva.abeles@ibblaw.co.uk
Peter Burnett
Consultant (non-practising)
01895 207887
peter.burnett@ibblaw.co.uk