Charities (Regulation and Administration) (Scotland) Bill

The Scottish Government recently published the draft wording of the Charities (Regulation and Administration) (Scotland) Bill as part of their legislative programme for 2022-23.

Although many of the changes are largely cosmetic, including extension to the list of offences which disqualify a trustee to reflect legislative changes since the law was last revised in 2005, some will require additional work for all charities to ensure they remain compliant. Equally, prohibition from acting as a charity trustee will also now disqualify individuals from holding a senior management post within a charity. While it seems unlikely that this will be an issue for charities, this highlights the importance of carrying out due diligence, including criminal record checks, when appointing senior staff to the charity.

One of the biggest changes will be to bring Scottish charity practices into line with the regime already in force in England and Wales, requiring OSCR to maintain a list of trustees for each charity. This change is not surprising given the increased scrutiny the charitable sector faces, but it will put information in the public domain with only limited exceptions, where the safety of a trustee or beneficiary may be adversely affected by the publication of the information. OSCR will now also hold a record of charity accounts for at least five years and make these available for all charities, which is an evolution of the current policy, allowing the publication of the most recent accounts to be published at OSCR’s discretion. We hope this increased transparency will be of benefit to charities by improving the reputation of the sector.

Other changes involve clarifying that services provided by a connected person are included in the restriction on remunerating trustees for services provided over-and-above their responsibilities as trustee.

OSCR will also now have the power to remove charities from the register for failing to submit accounts or not engaging with the regulator, which is a welcome step in protecting the reputation of Scotland’s third sector.

In relation to charity mergers and dissolution of charities, it has been clarified that charities must ensure their assets continue to be applied for public benefit when being wound up.

Although there’s no date for these changes to be introduced, you can contact a member of our EQ Charities team at charities@eqaccountants.co.uk, or call one of our offices, if you would like to discuss anything mentioned above in more detail.