An NCVO working group has called on the Charity Commission and HMRC to improve information sharing, and to consult with the sector on proposed regulatory changes which aim to reduce fraud in the sector, in a new report on managing risk.

The report, Managing risk: A new approach for the fit and proper regulation of charities, makes 13 recommendations for regulators and the sector, including that the Charity Commission and HMRC set up ‘gateways’ where there is duplication of information, so that there is one point of access to that information.

It is authored by the NCVO Task and Finish Group which was set up following concerns that the ‘fit and proper person’ test, which was introduced by the Finance Act 2010 for charities claiming gift aid, placed too much of an administrative burden on charities.

Speaking at the report launch, chair of the Group, Lord Plant of Highfield said: “Our aim is to reduce the burdens and unnecessary costs, while ensuring public trust and confidence in the sector is maintained.”

The report also included recommendations to the sector to promote good practice and self-regulation to prevent fraud, and stressed the importance of ensuring the 'fit and proper' person test is "objective and reasonable".

Last May, the HMRC revealed that  there had been no complaints since the test was introduced in April 2010.

Sir Stuart Etherington, chief executive of NCVO and member of the Group, said at the launch that the recommendations would "ensure organisations are engaged in best practice so the Charity Commission and HMRC can carry out effectively, their respective roles, to maintain public trust and confidence in the charity brand”.

Michelle Russell, head of compliance at the Charity Commission, told the Group that she hoped in the future discussions about regulation would be a “three way” involving the sector and HMRC.

Also present at the launch of the report was the head of charities and not for profit at Deloitte, Reza Motazedi, who reminded charities that it was the responsibility of trustees, not auditors, to ensure good governance.

Etherington added that “with the increasing stresses on the Commission reducing its staff” asking it to do more was bad timing, but said: “Nevertheless the need for collaboration is absolute.”

Members of the Task and Finish Group are: Baroness Browning of Whimple; Baroness Sherlock of Durham; Sir Stuart Etherington, chief executive of NCVO; Sir David Varney, former chairman of HM Revenue & Customs; Lindsay Driscoll, consultant at Bates, Wells and Braithwaite; John Stoker, former chief commissioner at the Charity Commission; and Caron Bradshaw, chief executive of CFDG.