Charities Act 2022: a practical introduction
11 April 2022
On 24 February 2022, the much anticipated Charities Act 2022 received Royal Assent and became law. But what are the changes and what do they mean for you as a charity trustee or senior executive?
The Act is not yet effective, so none of the changes are yet in force. However, once fully implemented (which is expected by autumn 2023) the Act will make significant changes to key legal requirements affecting charities.
We recently delivered a webinar on the key changes under the Act and how they are likely to affect you. This article introduces a series of articles as a follow up to that webinar, which have been written with you in mind. Our aim is to provide you with practical guidance on what to expect and how the changes are likely to affect you in your role in the management and administration of your charity.
Brief background to the Act
The new legislation is the culmination of a long process of review, which began in 2011 with Lord Hodgson’s review, after which the Law Commission conducted an extensive consultation on technical issues in charity law. The result of the Law Commission’s consultation process was a suite of recommendations and a draft Charities Bill. The Government accepted the vast majority of the recommendations, after which the draft Bill, with some amendments, made its way through Parliament, finally receiving Royal Assent on 24 February 2022.
Given its length (466 pages) and technical nature, you will be forgiven for not having read and digested the weighty Law Commission Report in full, and for perhaps feeling somewhat confused as to what all of these technical changes mean in practice. As yet, there is little guidance available for charity trustees, while we wait for the Charity Commission to progress its roadmap for gradual implementation of the Charities Act 2022.
The Charity Commission has published a brief blog post about what it considers to be the five key changes under the Act. However, this merely provides a list of the changes, with no detail about what has changed or what this will mean for you in practice. New and revised guidance will be published by the Charity Commission in due course. But, if you are keen to understand what to expect, our series of articles on the Act provides practical guidance on the changes and how we expect the changes to affect you.
Key changes under the Charities Act 2022
In our series of articles on the Charities Act 2022, we will provide you with clear explanations of the changes and practical implications for you in respect of the following topics:
- Amending governing documents
- Charity land transactions
- Failed appeals
- New power to make small ex gratia payments
- Amending the power to buy goods and services from trustees and connected persons
The Act makes a number of other important changes, including in respect of the Charity Commission’s powers (for example, a new power to ratify the appointment or election of charity trustees where uncertainty exists) and clarifying the law relating to permanent endowment. However, for the purposes of this series of articles, we have chosen to focus on those areas that we consider will be of key interest to charity trustees in the management and administration of charities in practice, and where we can provide some practical guidance at this stage. In respect of some of the changes, it will not be entirely clear how the changes will affect you until we have sight of secondary legislation and/or Charity Commission updated guidance and processes.
Implementation of the Charities Act 2022
None of the changes to charity law introduced by the Charities Act 2022 are yet in force. The Charity Commission announced in a blog post on 25 February 2022 that a plan has been developed that will see the gradual implementation of the changes between now and autumn 2023.
Some of the changes require secondary legislation, while others require substantial changes to the Charity Commission’s processes and systems. The implementation of the Act is a business priority for the Commission this year and next, and we will keep you updated as and when more is communicated about the planned timetable for the changes to come into force and effect.
If you would like advice in respect of any of the matters covered by our series of articles, or any other issue that is affected by the changes introduced by the Charities Act 2022, please get in touch with Liz Brownsell (Partner and Head of Charities) or another member of the Birketts Charities Team.
The content of this article is for general information only. It is not, and should not be taken as, legal advice. If you require any further information in relation to this article please contact the author in the first instance. Law covered as at April 2022.