Charity Law and Governance Bulletin
Community Interest Companies: changes to encourage investment
The CIC Regulator has responded to the consultation on the dividend and interest cap for CIC’s. The Regulator concludes that:
- the maximum dividend per share cap should be removed;
- the maximum aggregate dividend cap should be retained at 35%; and
- the maximum interest rate for performance related interest should be increased from 10% to 20%.
New rules for organisations who sell services and goods to the public
New regulations have been made by the government in relation to contracts with consumers. These new rules will come into force on 13 June 2014, and cover:
information requirements for distance, off-premises and on-premises contracts;
cancellation rights in distance and off-premises contracts; and
express consent for additional payments.
Guidance on new trustee powers for investing charity permanent endowments
The Charity Commission has published new regulations and guidance for trustees on adopting a total return approach to the investment of the charity's permanent endowment. New legislation, which came into effect on 1 January 2014, will allow the trustees of permanently endowed trusts to adopt a total return approach to investment without seeking prior permission from the Commission.
Results of major new survey on the state of the charity sector published
The Centre for Social Justice has published its much anticipated report on the state of the charity sector following a major national survey: ‘Something’s Got To Give: The state of Britain’s voluntary and community sector’. One interesting conclusion is that the government should use dynamic smaller organisations to target social issues, rather than spending ever larger sums through its existing ‘favourites’.
The Vote on Scottish Independence: time for charities to plan ahead?
Many English-based charities conduct some activity in Scotland or have a registered presence there. Although the vote on Scottish Independence is not until September 2014, charities who may be substantially affected should starting planning now. Potential issues include:
- changes in taxation and accounting requirements;
- a need to split operations and resources for charities also registered in Scotland; and
- fundraising and providing a benefit in a country outside of the United Kingdom.