The Institute of Chartered Accountants of Scotland (ICAS) has warned the Big Society’s de-regulation taskforce that ignoring Scotland in its remit could introduce further complexity for charities across the UK.
The government’s de-regulation task force has been set up to examine how to reduce red tape for charities in England and Wales.
However, in a letter to the minister for civil society Nick Hurd welcoming the review, ICAS’ Charities Committee advises that two of the main areas under review for reform - company law and gift aid - are UK-wide issues and therefore impact more broadly than just English and Welsh charities.
David Wood (pictured), executive director of technical policy at ICAS, said: “The taskforce is committed to making it easier to run charities by simplifying the regulatory environment, systems and processes. The danger is by focusing on just England and Wales and not considering the bigger picture, you have the problem of legislation and regulation which overlaps other jurisdictions within the UK; leading to more complexity for charities and regulators.”
ICAS cites that previous amendments to the Companies Act 2006, aimed at removing the audit requirements of small and medium-sized charitable companies from company law to charity law, gave insufficient regard to how Scottish charities would be affected; causing confusion to which legislation applies to the audit of some charitable companies; some of which have cross border operations.
The Institute urges that any further changes made to company law as part of the taskforce’s remit works with current laws in place in all UK jurisdictions.
In its response ICAS is also backing a single definition of what constitutes a charity in the UK.
“There are currently a number of different definitions of charity across the UK,” explains Wood. “Having a single meaning would reduce complexity for charities and regulators and ensure consistent access to charity tax reliefs. A charity registered in one part of the UK should be able to operate in another without having to meet more than one set of criteria. We would like to see this issue included in the taskforce’s remit.”
In further recommendations, the Institute has highlighted concerns over the different approaches taken by regulators to the filing of charities annual reports and accounts. The Charity Commission, the Office of the Scottish Charity Regulator, Companies House and HMRC all require annual reports and accounts to be filed using different methods. ICAS would like to see regulators co-ordinating their filing arrangements to a greater extent in future to reduce the time spent by charities complying with these.
