Concern over 'Public Benefit' test

The Lawyers' Christian Fellowship and Christian Concern for our Nation is urging churches and Christian organisations to register their concern over the Government’s attempt in various consultation documents to review the 'public benefit' of Christian charities.

As part of a wide-sweeping upgrade of charity registration and management of charities by the Charity Commissioners, the Commission published a consultation document, earlier this year, looking at whether charities which did not appear to meet a 'public benefit test' should lose their rights to Registered Charity status, including tax advantages through Gift Aid.

The Charities Act 2006 removed the legal presumption that charities established for the advancement of religion have purposes that are for the public benefit.

"‘Public benefit’ is not defined in the Charities Act 2006 and it has specifically been left to the Charity Commission to consult on the matter. Christian charities will now have to prove their ‘public benefit’ to the Charity Commission. Following on from this consultation on the draft public benefit guidance there are a number of other consultations on which Christian charities are urged to respond.

The Government proposal is that every charity will have to prove its 'public benefit' on an annual basis. Those who fail to persuade Civil Servants could be de-registered and lose out on taxable advantages, such as claiming tax back on donations given via Gift Aid.

There is currently an Office of Third Sector consultation on Reporting Public benefit-Consultation on Changes to the Accounting and Reporting Framework, which began on the 14 June and will end on the 14 September 2007 with 3 questions specific to public benefit, see http://www.charitycommission.gov.uk/enhancingcharities/pbaccrep.asp .

http://www.cabinetoffice.gov.uk/third_sector/documents/charity_act/pb_reporting.pdf

More information is provided on the Office of Third Sector web site including a detailed consultation document in relation to Charity accounting with the option of answering more questions relevant to Christian Charity accounts and a partial regulatory impact assessment. See. http://www.cabinetoffice.gov.uk/third_sector/law_and_regulation/charities_act_2006/implementation.asp

It is recommended that Christian Charities at least focus on the 3 questions in the public benefit extract of this Office of Third Sector consultation with a closing date of the 14 September 2007. This proposes that the annual report of a charity is the best medium through which charities can report public benefit. It also proposes that the draft 2007 regulations which deal with accounting and reporting matters should incorporate this requirement on a statutory regulations basis. Charities should consider if there are alternative more voluntary means and/or different mechanisms whereby public benefit could be reviewed or reported. This is important for charities because it will be a practical way in which the Charities Commission will ask for proof of public benefit.

There are two other Charity Commission consultations with a closing date of the 3 September 2007.One of these relates to an internal decision review procedure by the Charity Commission on all legal decisions which could later be appealed to a tribunal as set out in Schedule 4 of the Charities Act 2006. The LCF has submitted a response to the Commission’s decision review consultation which can be found at: http://www.christianconcernforournation.co.uk/docs/ccAug07.doc

This decision review consultation relates to important matters set out in that Schedule such as decisions not to register a charity or remove a charity from the register and cy-pres schemes. This will be important if Christian charities fail to be registered because of the emphasis upon public benefit. There is also a consultation in relation to complaints and customer feedback procedures in relation to making complaints about the Charity Commission but this is in relation to complaints which do not come under the decision review procedure. Both consultations can be found at: http://www.charitycommission.gov.uk/enhancingcharities/feedbackcons.asp

The Charity commission is also expected to produce a consultation in November 2007 on further draft sub- sector guidance dealing with public benefit for Charities for the advancement of religion.

http://www.charitycommission.gov.uk/library/enhancingcharities/pdfs/pbconsult.pdf (see page 5 for proposed timetable and 2.5 & 2.12 on enquiries on umbrella sub-sector consultations prior to this draft guidance)

In addition, the Ministry of Justice is consulting on the Draft Charity Tribunal Rules 2007.This consultation asks only 2 specific questions but would be grateful for comments and feedback on any of the draft rules. It is of concern that the draft rules are only proposing a time limit of 28 days after the date on which the appellant was notified of the Commission’s final decision to file an appeal. Charities may wish to appeal to the Tribunal on the basis of final Commission decisions such as decisions not to register or remove a charity from the register which may be in relation to the public benefit requirement. The closing date for this consultation is the 7 November 2007 and can be found at:

http://www.justice.gov.uk/publications/cp1907.htm

The LCF/CCFON is encouraging church leaders and trustees of Christian organisations to write to the Office of the Third Sector/Charity Commission/Ministry of Justice and respond to the consultations, particularly those on public benefit matters, to demonstrate the depth of concern amongst Christian charities.

E-mail: helen.morgan@cabinet-office.x.gsi.gov.uk

E mail address: ctconsultation@tribunals.gsi.gov.uk

Please see specific consultations for address and e-mail specifications.

Andrea Minichiello Williams LCF Public Policy Officer: 0771 2591164