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Trustee payment laws change as Charities Act implementation begins

31 Oct 2022 News

By sebra, Adobe

The Department for Digital, Culture, Media & Sport (DCMS) has started implementing law changes as part of the Charities Act 2022, including different rules for paying trustees.

After gaining royal assent in February, the first set of changes from the Act came into force today, with more to follow in 2023.

The Charity Commission has updated its guidance to reflect the new rules, which also include changes to administrative requirements surrounding “failed” fundraising appeals and new power for royal charter charities.

Charities able to pay trustees for providing services

Changes that come into force today include:

  • An extended power for charities to pay trustees for providing goods to the charity under certain circumstances.
  • A reduction in the administrative complexities surrounding fundraising appeals that do not reach, or exceed, fundraising targets.
  • A new statutory power for royal charter charities to change sections of their royal charter which they could not previously change, with the approval of the Privy Council.

Other provisions of the Act now in force:

  • Confirm that the Commission’s scheme-making powers include making schemes for charitable companies.
  • Confer trust corporation status automatically to existing and future corporate charities in respect of any charitable trust of which the corporation is a trustee.
  • Update provisions relating to giving public notice to written consents and orders of the Charity Commission under various sections of the Charities Act 2011.
  • Mean that when a charity changes its governing document by parliamentary scheme, the scheme will by default always be under a lighter touch parliamentary process.

Regulator: Changes designed to ‘make things easier for trustees’

The Charity Commission said it has been reviewing and updating guidance for trustees and providing training to staff as well as amending some digital services on its website to support DCMS’ implementation of the Act.

Aarti Thakor, director of legal and accounting services at the Charity Commission, said: “The Charities Act 2022 is designed to make a positive, practical difference to charities and where possible, to make things easier for trustees.

“Today, a number of changes have come into effect, with more to follow next year. We have updated our guidance to reflect the first set of changes so that trustees can understand what this means for them and the charities they serve.”

DCMS plans to implement the next set of provisions from the act in spring next year, with more to come in autumn 2023.

It recently decided to review provisions of the act on ex-gratia payments, which could allow trustees to return museum items for ethical reasons.

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