Share

Withdraw gift aid if accounts submitted late, says Charity Commission

Withdraw gift aid if accounts submitted late, says Charity Commission
News

Withdraw gift aid if accounts submitted late, says Charity Commission1

Finance | Niki May Young | 20 Apr 2012

Gift aid should be withdrawn from charities which have not filed their accounts, according to the Charity Commission's submission to Lord Hodgson's Charities Act review.

The measure is the favoured sanction by the Commission out of a number of possible punishments for charities which do not take their responsibility to submit their accounts for public viewing on the register seriously. 

The Commission said that the tax relief withdrawal would be a preferred alternative to the existing sanction of criminal prosecution, which it says is "disproportionate except in the most extreme cases of default or where linked with other serious criminal behaviour".

However the Commission was keen to express that the act of filing accounts is a compulsory and necessary measure: "We consider that complying with this filing requirement is a key trustee duty.  We would like to see a climate in which failure to comply is unacceptable both legally and culturally in the charitable sector."

The Charity Commission recently 'named and shamed' the charity set up by MP George Galloway, Viva Palenstina, a common route taken when accounts have not been filed on time. However it said that this approach, designed both as a nudge to the perpetrating charity and as a warning to fellow charities, "has its limitations":

"For charities with an active stakeholder community or seeking new funding then ‘naming and shaming’ can be a powerful sanction. But for those with a limited or distant relationship with the public are less influenced by it," it said in its submission to Lord Hodgson.

Suspension from the register would be similarly dependent on its relationship with stakeholders, the Commission said. 

A sliding scale of fines dependant on income, however, would prove an effective incentive to charities to file their accounts, accepted the Commission. It pointed to the example that some charitable companies had submitted their accounts to Companies House, which sets fines for lateness, but not to the Commission in the past. 

But gift aid withdrawal, in combination with a suspension from the register, was mooted as the "strongest option" for an appropriate sanction, providing taxpayers with a clear response to failure to be transparent. Although it was noted that it would require a change to tax law and would not be an appropriate sanction for charities which do not rely on charitable donations. 

The Charity Commission response is one of 150 to Lord Hodgson's Charities Act review which asks key questions relating to the legislation and regulations affecting the charity sector. The public consultation closed for responses on Monday, with 110 organisational and 40 individual responses. 

Sub-regulation and independence

The Commission answered a number of questions laid down by Lord Hodgson, including those regarding the effectiveness of the Commission itself. The Commission pointed in the main to its recent strategic review conducted following the coalition government's cost cutting measures, which have seen the Commission's statutory budget reduced by around one third, to answer the review's questions.

The Commission underlined that its independence from government "underpins the nature of charity and the presence of a regulator which is independent of government as well as being independent of the sector supports this". Because of this, the Commission is not in support of a system of sub-regulation, as mooted by the likes of the FRSB and IoF in response to the review. 

"Our view is that there is insufficient evidence that a different model would work better," the Commission concluded.

 

 

 

Barbara
20 Apr 2012

Papers are filed to the Commission late, in some cases never (why some charities are still registered if have never filed anything for last 5 years - can anybody explain? some sort of a legal loophole or something?). Also, reports and accounts don't meet SORP criteria, for example charities massively omit duty to report on average number of employees (full time equivalents) so the question is: why does a taxpayer pay for the Commission in the first place? Clean the mess, tighten regulations, remove those charities who are having a laugh for years or scrap the whole scheme altogether to stop wasting people's time and money. Having said that, I really hope thatthe review will allow CC to actually perform duties, accountability and transparency are big words that need more action and fast.

Comments

[Cancel] | Reply to:

Close »

Community Standards

The civilsociety.co.uk community and comments board is intended as a platform for informed and civilised debate.

We hope to encourage a broad range of views, however, there are standards that we expect commentators to uphold. We reserve the right to delete or amend any comments that do not adhere to these standards.

We welcome:

  • Robust but respectful debate
  • Strongly held opinions
  • Intelligent relevant discussion
  • The sharing of relevant experiences
  • New participants

We will not publish:

  • Rude, threatening, offensive, obscene or abusive language, or links to such material
  • Links to commercial organisations or spam postings. The comments board is not an advertising platform
  • The posting of contact details for yourself or others
  • Comments intended for malicious purpose or mindless abuse
  • Comments purporting to be from another person or organisation under false pretences
  • Gratuitous criticism, commentary or self-promotion
  • Any material which breaches copyright or privacy laws, or could be considered libellous
  • The use of the comments board for the pursuit or extension of personal disputes

Be aware:

  • Views expressed on the comments board are left at users’ discretion and are in no way views held or supported by Civil Society Media
  • Comments left by others may not be accurate, do not rely on them as fact
  • You may be misunderstood - sarcasm and humour can easily be taken out of context, try to be clear

Please:

  • Enjoy the opportunity to express your opinion and respect the right of others to express theirs
  • Confine your remarks to issues rather than personalities

Together we can keep our community a polite, respectful and intelligent platform for discussion.

Free eNews

Wellcome Trust's investment portfolio reaches £18bn

19 Dec 2014

The Wellcome Trust has posted a 15.4 per cent return on its investment portfolio, earning £2.5bn for...

HMRC tax statistics suggest large rise in charitable giving

19 Dec 2014

Tax relief on giving is expected to rise by 11 per cent in the year to March 2015, suggesting a large...

Andrew O’Brien moves from NCVO to head CFG’s policy team

19 Dec 2014

Andrew O’Brien is to join the Charity Finance Group as head of policy and public affairs.

Camelot CEO says deregulation of society lotteries may not increase good cause money

18 Dec 2014

The chief executive of Camelot has said that reducing the regulation around society lotteries may not...

Ukip supporters trust charities less than other voters do, NPC study finds

18 Dec 2014

A survey by Ipsos Mori for NPC about how charities are perceived by people who vote for various political...

Tobin Aldrich leaves Sightsavers to set up consultancy

17 Dec 2014

Former director of global fundraising for Sightsavers, Tobin Aldrich, has announced that he has left the...

CRUK crowdfunding effort flops

15 Dec 2014

Cancer Research UK’s three new crowdfunding campaigns did not manage to raise even 10 per cent of the...

Volunteering platform Do-it relaunches

12 Dec 2014

Online volunteering platform Do-it has been relaunched today by its new owner, the Do-it Trust, with more...

‘The challenge is getting people to use IT systems’

28 Nov 2014

Whatever type of customer-relationship management system charities use, the biggest challenge is convincing...

Join the discussion

Twitter
 
Training

Attending our one day courses is a highly effective way of ensuring new and existing trustees fully understand their role, responsibilities and liabilities.

>> Find out more <<