The New Charities Act (NI) 2022 is here – are you ready?
The new Charities Act (Northern Ireland) 2022 came into force when it received Royal Assent on 30 March 2022.
The Charity Commission for Northern Ireland (the “Commission”) is sending out update emails to all charity trustees to ensure their information is up to date on the Charities Register. This is because there will be important communications from the Commission in relation to the new Charities Act and the implications for your charity. You can download an information pack from the Charity Commission here: https://www.charitycommissionni.org.uk/news/the-charities-act-northern-ireland-2022-information-pack/
You may be aware that due to the decisions of the High Court subsequently backed up by the Court of Appeal in February 2020 that a significant number of decisions taken by Commission staff were rendered unlawful where the staff member’s authority to take the decision depended on the Commission having delegated a statutory power or duty; the Court found that the Commission (the Charity Commission as a body corporate) do not have implied or express power to delegate their functions to staff acting alone. This affected approximately 7,200 decisions taken before 16 May 2019. This included decisions such as registering a charity and granting consents, for example to alter the objects of a charity and numerous other decisions. The impact of this decision meant that those 7,200 decisions are unlawful.
The new Charities Act rectifies the position with retrospective effect to make those decisions lawful and also gives fresh appeal rights to be exercised within a strict 91 day period from the date of Royal Assent i.e. from 30 March 2022.
A number of decisions are not included within this retrospective effect. This will not alter the outcome of court or tribunal proceedings finally decided before the date of Royal Assent or where on the date of Royal Assent, court or tribunal proceedings are pending. Those proceedings are to be decided as if the new Act will not apply.
The new Act does not apply to a number of decisions such as a decision that a statutory inquiry report be published, certain directions given in relation to statutory inquiries nor does it apply to certain powers of the Commission such as removal of a trustee. Those decisions remain unlawful.
There is also an important provision in relation to the accounting and reporting requirements. This asserts in essence an exempt year relating to the financial year of an affected charity beginning before 1 April 2020. So if your charity has an accounting year end of 31 March 2022 it does not have to comply with their usual accounting and reporting regime until its year ended 31 March 2023 and then has a further 10 months to upload its report to the Commission, i.e. by 31 January 2024. This only applies to those charities which were on the register and affected by the Court of Appeal decision. For any charities registered after 16 May 2019 you will have had to comply with the reporting regime as usual. In any event many charities may and many have been submitting their trustee annual reports, annual monitoring returns and accounts voluntarily and are encouraged to do so. This gives full transparency to your donors and beneficiaries and funders. For those charities that are companies they will have had to comply with The Companies Act filing requirements in any event.
The new Act introduces a new express power for the Commission to delegate to staff into Schedule 1 of the 2008 Act. This will be subject to a scheme of delegation to be made by the Department of Communities and it must carry out a public consultation before such a scheme is introduced.
The final part of the Act relates to the power to provide for certain charities to be exempt from registration by reference to thresholds but this is subject to the Department for Communities making regulations to prescribe the thresholds if it wishes to proceed. Incidentally the report of the Independent Panel recommended that all charities should be registered.
If you have any queries about how the new Charities Act may affect your charity or wish to discuss the possibility of any appeal rights please contact a member of our charities team promptly and we shall be glad to help.