Charities Bill [HL]

House of Commons

Session 2005 - 06
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Charities Bill [HL]

Charities Bill [HL]
Schedule 4 — Appeals and applications to Charity Tribunal
102

(b)
the reference in that paragraph to paragraphs 1 to 5 of this
Schedule included a reference to any other provision
relating to appeals to the Tribunal which is contained in
Chapter 1 of Part 3 of the Charities Act 2005.
Schedule 1D
5
Section 2A(4)

References to Charity Tribunal
References by Commission
1     (1)
A question which—
(a)
has arisen in connection with the exercise by the
Commission of any of its functions, and
10
(b)
involves either the operation of charity law in any respect
or its application to a particular state of affairs,

may be referred to the Tribunal by the Commission if the
Commission considers it desirable to refer the question to the
Tribunal.
15
      (2)
The Commission may make such a reference only with the consent
of the Attorney General.
      (3)
The Commission shall be a party to proceedings before the
Tribunal on the reference.
      (4)
The following shall be entitled to be parties to proceedings before
20
the Tribunal on the reference—
(a)
the Attorney General, and
(b)
with the Tribunal’s permission—
(i)
the charity trustees of any charity which is likely to
be affected by the Tribunal’s decision on the
25
reference,
(ii)
any such charity which is a body corporate, and
(iii)
any other person who is likely to be so affected.
References by Attorney General
2     (1)
A question which involves either—
30
(a)
the operation of charity law in any respect, or
(b)
the application of charity law to a particular state of affairs,

may be referred to the Tribunal by the Attorney General if the
Attorney General considers it desirable to refer the question to the
Tribunal.
35
      (2)
The Attorney General shall be a party to proceedings before the
Tribunal on the reference.
      (3)
The following shall be entitled to be parties to proceedings before
the Tribunal on the reference—
(a)
the Commission, and
40
(b)
with the Tribunal’s permission—

Charities Bill [HL]
Schedule 4 — Appeals and applications to Charity Tribunal
103

(i)
the charity trustees of any charity which is likely to
be affected by the Tribunal’s decision on the
reference,
(ii)
any such charity which is a body corporate, and
(iii)
any other person who is likely to be so affected.
5
Powers of Commission in relation to matters referred to Tribunal
3     (1)
This paragraph applies where a question which involves the
application of charity law to a particular state of affairs has been
referred to the Tribunal under paragraph 1 or 2 above.
      (2)
The Commission shall not take any steps in reliance on any view
10
as to the application of charity law to that state of affairs until—
(a)
proceedings on the reference (including any proceedings
on appeal) have been concluded, and
(b)
any period during which an appeal (or further appeal)
may ordinarily be made has ended.
15
      (3)
Where—
(a)
paragraphs (a) and (b) of sub-paragraph (2) above are
satisfied, and
(b)
the question has been decided in proceedings on the
reference,
20

the Commission shall give effect to that decision when dealing
with the particular state of affairs to which the reference related.
Suspension of time limits while reference in progress
4     (1)
Sub-paragraph (2) below applies if—
(a)
paragraph 3(2) above prevents the Commission from
25
taking any steps which it would otherwise be permitted or
required to take, and
(b)
the steps in question may be taken only during a period
specified in an enactment (“the specified period”).
      (2)
The running of the specified period is suspended for the period
30
which—
(a)
begins with the date on which the question is referred to
the Tribunal, and
(b)
ends with the date on which paragraphs (a) and (b) of
paragraph 3(2) above are satisfied.
35
      (3)
Nothing in this paragraph or section 74A of this Act prevents the
specified period being suspended concurrently by virtue of sub-
paragraph (2) above and that section.
Agreement for Commission to act while reference in progress
5     (1)
Paragraph 3(2) above does not apply in relation to any steps taken
40
by the Commission with the agreement of—
(a)
the persons who are parties to the proceedings on the
reference at the time when those steps are taken, and

Charities Bill [HL]
Schedule 4 — Appeals and applications to Charity Tribunal
104

(b)
(if not within paragraph (a) above) the charity trustees of
any charity which—
(i)
is likely to be directly affected by the taking of
those steps, and
(ii)
is not a party to the proceedings at that time.
5
      (2)
The Commission may take those steps despite the suspension in
accordance with paragraph 4(2) above of any period during which
it would otherwise be permitted or required to take them.
      (3)
Paragraph 3(3) above does not require the Commission to give
effect to a decision as to the application of charity law to a
10
particular state of affairs to the extent that the decision is
inconsistent with any steps already taken by the Commission in
relation to that state of affairs in accordance with this paragraph.
Appeals and applications in respect of matters determined on references
6     (1)
No appeal or application may be made to the Tribunal by a person
15
to whom sub-paragraph (2) below applies in respect of an order or
decision made, or direction given, by the Commission in
accordance with paragraph 3(3) above.
      (2)
This sub-paragraph applies to a person who was at any stage a
party to the proceedings in which the question referred to the
20
Tribunal was decided.
      (3)
Rules under section 2B(1) of this Act may include provision as to
who is to be treated for the purposes of sub-paragraph (2) above
as being (or not being) a party to the proceedings.
      (4)
Any enactment (including one contained in this Act) which
25
provides for an appeal or application to be made to the Tribunal
has effect subject to sub-paragraph (1) above.
Interpretation
7     (1)
In this Schedule—
“charity law” means—
30
(a)
any enactment contained in, or made under, this Act
or the Charities Act 2005,
(b)
any other enactment specified in regulations made by
the Secretary of State, and
(c)
any rule of law which relates to charities, and
35
“enactment” includes an enactment comprised in
subordinate legislation (within the meaning of the
Interpretation Act 1978), and includes an enactment
whenever passed or made.
      (2)
The exclusions contained in section 96(2) of this Act (ecclesiastical
40
corporations etc.) do not have effect for the purposes of this
Schedule.”

Charities Bill [HL]
Schedule 5 — Exempt charities: increased regulation under 1993 Act
105

Schedule 5
Section 12

Exempt charities: increased regulation under 1993 Act
Power to require charity’s name to be changed
1
In section 6 of the 1993 Act (power of Commission to require charity’s name
to be changed) omit subsection (9) (exclusion of exempt charities).
5
Power to institute inquiries
2
In section 8(1) of the 1993 Act (power of Commission to institute inquiries
with regard to charities but not in relation to any exempt charity) after “any
exempt charity” insert “except where this has been requested by its principal
regulator.”
10
Power to call for documents etc.
3
In section 9 of the 1993 Act (power of Commission to call for documents and
search records) omit subsection (4) (exclusion of documents relating only to
exempt charities).
Concurrent jurisdiction of Commission with High Court
15
4     (1)
Section 16 of the 1993 Act (concurrent jurisdiction of Commission with High
Court for certain purposes) is amended as follows.
      (2)
In subsection (4)(c) (application for Commission to exercise powers may be
made by Attorney General except in case of exempt charity) omit “in the case
of a charity other than an exempt charity,”.
20
      (3)
In subsection (5) (jurisdiction exercisable in case of charity which is not an
exempt charity and whose annual income does not exceed £500) omit
“which is not an exempt charity and”.
Further powers of Commission
5
In section 17(7) of the 1993 Act (expenditure by charity on promoting
25
Parliamentary Bill needs consent of court or Commission except in case of
exempt charity) omit the words from “but this subsection” onwards.
Power to act for protection of charities
6
In section 18 of the 1993 Act (power of Commission to act for protection of
charities) for subsection (16) substitute—
30
“(16)
In this section—
(a)
subsections (1) to (3) apply in relation to an exempt charity,
and
(b)
subsections (4) to (6) apply in relation to such a charity at any
time after the Commission have instituted an inquiry under
35
section 8 with respect to it,

and the other provisions of this section apply accordingly.”

Charities Bill [HL]
Schedule 6 — Group Accounts
106

Power to give directions about dormant bank accounts
7
In section 28 of the 1993 Act (power of Commission to give directions about
dormant bank accounts of charities), omit subsection (10) (exclusion of
accounts held by or on behalf of exempt charity).
Proceedings by persons other than Commission
5
8     (1)
Section 33 of the 1993 Act (charity proceedings by persons other than
Commission) is amended as follows.
      (2)
In subsection (2) (proceedings relating to a charity other than an exempt
charity must be authorised by the Commission) omit “(other than an exempt
charity)”.
10
      (3)
In subsection (7) (participation by Attorney General in proceedings relating
to charity other than exempt charity) omit “(other than an exempt charity)”.
Power to order disqualified person to repay sums received from charity
9
In section 73 of the 1993 Act (consequences of person acting as charity trustee
while disqualified), in subsection (4) (power of Commission to order
15
disqualified person to repay sums received from a charity other than an
exempt charity) omit “(other than an exempt charity)”.
Schedule 6
Section 30

Group Accounts
20

After Schedule 5 to the 1993 Act insert—
“Schedule 5A
Section 49A

Group Accounts
Interpretation
1     (1)
This paragraph applies for the purposes of this Schedule.
25
      (2)
A charity is a “parent charity” if—
(a)
it is (or is to be treated as) a parent undertaking in relation
to one or more other undertakings in accordance with the
provisions of section 258 of, and Schedule 10A to, the
Companies Act 1985, and
30
(b)
it is not a company.
      (3)
Each undertaking in relation to which a parent charity is (or is to
be treated as) a parent undertaking in accordance with those
provisions is a “subsidiary undertaking” in relation to the parent
charity.
35

Charities Bill [HL]
Schedule 6 — Group Accounts
107

      (4)
But sub-paragraph (3) does not have the result that any of the
following is a “subsidiary undertaking”—
(a)
any special trusts of a charity,
(b)
any institution which, by virtue of a direction under
section 96(5) of this Act, is to be treated as forming part of
5
a charity for the purposes of this Part of this Act, or
(c)
any charity to which a direction under section 96(6) of this
Act applies for those purposes.
      (5)
“The group”, in relation to a parent charity, means that charity and
its subsidiary undertaking or undertakings, and any reference to
10
the members of the group is to be construed accordingly.
      (6)
For the purposes of—
(a)
this paragraph, and
(b)
the operation of the provisions mentioned in sub-
paragraph (2) above for the purposes of this paragraph,
15

“undertaking” has the meaning given by sub-paragraph (7) below.
      (7)
For those purposes “undertaking” means—
(a)
an undertaking as defined by section 259(1) of the
Companies Act 1985, or
(b)
a charity which is not an undertaking as so defined.
20
Accounting records
2     (1)
The charity trustees—
(a)
of a parent charity, or
(b)
of any charity which is a subsidiary undertaking,

must ensure that the accounting records kept in respect of the
25
charity under section 41(1) of this Act not only comply with the
requirements of that provision but also are such as to enable the
charity trustees of the parent charity to ensure that, where any
group accounts are prepared by them under paragraph 3(2), those
accounts comply with the relevant requirements.
30
      (2)
If a parent charity has a subsidiary undertaking in relation to
which the requirements of section 41(1) of this Act do not apply,
the charity trustees of the parent charity must take reasonable
steps to secure that the undertaking keeps such accounting
records as to enable the trustees to ensure that, where any group
35
accounts are prepared by them under paragraph 3(2), those
accounts comply with the relevant requirements.
      (3)
In this paragraph “the relevant requirements” means the
requirements of regulations under paragraph 3.
Preparation of group accounts
40
3     (1)
This paragraph applies in relation to a financial year of a charity if
it is a parent charity at the end of that year.
      (2)
The charity trustees of the parent charity must prepare group
accounts in respect of that year.
      (3)
“Group accounts” means consolidated accounts—
45

Charities Bill [HL]
Schedule 6 — Group Accounts
108

(a)
relating to the group, and
(b)
complying with such requirements as to their form and
contents as may be prescribed by regulations made by the
Secretary of State.
      (4)
Without prejudice to the generality of sub-paragraph (3),
5
regulations under that sub-paragraph may make provision—
(a)
for any such accounts to be prepared in accordance with
such methods and principles as are specified or referred to
in the regulations;
(b)
for dealing with cases where the financial years of the
10
members of the group do not all coincide;
(c)
as to any information to be provided by way of notes to the
accounts.
      (5)
Regulations under that sub-paragraph may also make provision—
(a)
for determining the financial years of subsidiary
15
undertakings for the purposes of this Schedule;
(b)
for imposing on the charity trustees of a parent charity
requirements with respect to securing that such financial
years coincide with that of the charity.
      (6)
If the requirement in sub-paragraph (2) applies to the charity
20
trustees of a parent charity in relation to a financial year—
(a)
that requirement so applies in addition to the requirement
in section 42(1) of this Act, and
(b)
the option of preparing the documents mentioned in
section 42(3) of this Act is not available in relation to that
25
year (whatever the amount of the charity’s gross income
for that year).
      (7)
Sub-paragraph (2) has effect subject to paragraph 4.
Exceptions relating to requirement to prepare group accounts
4     (1)
The requirement in paragraph 3(2) does not apply to the charity
30
trustees of a parent charity in relation to a financial year if at the
end of that year it is itself a subsidiary undertaking in relation to
another charity.
      (2)
The requirement in paragraph 3(2) does not apply to the charity
trustees of a parent charity in relation to a financial year if the
35
aggregate gross income of the group for that year does not exceed
such sum as is specified in regulations made by the Secretary of
State.
      (3)
Regulations made by the Secretary of State may prescribe
circumstances in which a subsidiary undertaking may or (as the
40
case may be) must be excluded from group accounts required to
be prepared under paragraph 3(2) for a financial year.
      (4)
Where, by virtue of such regulations, each of the subsidiary
undertakings which are members of a group is either permitted or
required to be excluded from any such group accounts for a
45
financial year, the requirement in paragraph 3(2) does not apply to
the charity trustees of the parent charity in relation to that year.