Charities Act 2022

This short article highlights the changes being introduced by the Charities Act 2022, which will amend the Charities Act 2011.

The changes are expected to come into force between autumn 2022 and autumn 2023 and an overview of the full changes can be found by following this link: Charities Act 2022: implementation plan.

This page explains:

• changes to how charities sell, lease or transfer land (due to come into effect in spring 2023)
• greater flexibility to make use of ‘permanent endowment’ – this is money or property originally meant to be held by a charity forever (due to come into effect in spring 2023); and
• changes to how charities can amend their governing documents (due to come into effect in autumn 2023)
  below are short summaries of the changes that came into effect on 31 October.

Paying trustees for providing goods to the charity

Charities already have a statutory power that they can use, in certain circumstances, to pay trustees for providing a service to the charity beyond usual trustee duties, or goods connected to that service.

This statutory power is being changed by the Charities Act 2022. As a result, charities will be able to pay trustees in certain circumstances for just providing goods to the charity.

So, using the statutory power, trustees could be paid for:

• services only, for example estate agency or computer consultancy
• services and associated goods, for example plumbing or painting service and any associated materials such as plumbing parts or paint
• following implementation of the Act in autumn, goods only, for example supplying stationery to the charity

Read the Commission’s updated guidance on their website

Fundraising appeals that do not raise enough or raise too much

Sometimes, appeals do not raise the amount needed to deliver the aim you wanted or raise too much so that there are funds leftover. Or circumstances may change and you cannot use the donations as you intended.

The Charities Act 2022 will reduce complexity surrounding what trustees need to do in these situations. For example:

• the current requirement in some circumstances for charities to wait six months for donors to ask for a refund will no longer apply
• there will be a simpler process for obtaining our authority; this will replace the need for the Commission to make a scheme
• if the donations that can be spent on new purposes (different to the purposes you raised them for) are less than £1000, trustees can act without the Commission’s involvement if they comply with the new legal requirements

NB This short article is for guidance only; I would recommend all Trustees make themselves fully conversant with the changes being made by visiting the Charity Commission’s website. The main contact with your group should have been informed of the changes and may wish to distribute information and links to all Trustees.

To explore further please follow the link below
https://www.gov.uk/guidance/charities-act-2022-guidance-for-charities