Are you in charge of a charity? Check the new disqualification rules

Charities have been in the news lately, and not for the right reasons. Meanwhile the Charity Commission has issued new rules that will automatically disqualify people from office, notably if they have committed one of a list of criminal offences. Be aware: and note that you do not have long to prepare for any necessary changes in personnel.

On August 1st, 2018, the amended rules come into force. The pre-existing rules remain in force but there is a wider net of senior executives that is caught by it. This includes CEO and Finance Director roles; but it is not bound by job title, rather by job description – how accountable and responsible the person is.

Specific new automatic disqualifications apply to:

  • terrorism
  • money laundering
  • sex offences

Applying for a Waiver

If your charity feels that an affected individual has qualities and expertise that you can ill afford to lose, you may apply to the Charity Commission for a waiver to this ruling. The ability to do this began on February 1st, so it is important to decide on any cases that you may want to make: the Commission wishes to receive waiver submissions by June 1st, to give them time to process the cases prior to August 1st.

Internal Processes

In the majority of charities, no immediate action will be required but that does not mean that you can be complacent. These are the key actions to be taken:

1. Review recruitment practice: specifically, trustees and managers should introduce a new declaration for senior staff and new joiners, following a guideline document that is due to be published by the Charity Commission
2. In any cases where the new rules apply, decide on enforcing a resignation or applying for a waiver
3. Begin planning the succession and handover if there has to be a resignation
4. Create a system whereby declarations are updated by senior managers and trustees at least once a year, and the onus is placed on them to declare automatically if they commit an offence that should lead to their departure (or to a waiver being sought).

We at Odiri Tax Consultants can advise charity trustees and managers on these and other legislative and administrative matters. Don’t put this issue off: let’s discuss how you can deal with it, within the timescale.

Loveth Watson

Loveth is a qualified accountant and tax consultant with over 20 years experience. She started her career with top 5 accountancy practice and held the position of tax manager prior to starting her own practice. Loveth is a member of the Institute of Financial Accountants, Institute of Public Accountants and the Association of Taxation Technicians. Loveth’s background in accounting, corporate and personal tax enable her to advise shareholders on the personal tax implications of corporate structuring and transactions, ensuring a holistic approach to tax planning is provided. Loveth advises clients in the areas of accounting, tax and business development. Her main focus is in delivering services to owner-managed businesses and seeking structured solutions to the challenges that they face.