Charities Act 2022: informationguidance aboutfor the changes being introducedcharities

This page is about changes being introduced by the Charities Act 2022, which will amend the Charities Act 2011.

The changes are expected to come into force in autumn 2022, spring 2023 and autumn 2023.

An overview of the full changes can be found on this page: Charities Act 2022: implementation plan. This includes:

• changes to how charities sell, lease or transfer land (due to come into effect in spring 2023)
• greater flexibility to make use of ‘permanent endowment’ – this is money or property originally meant to be held by a charity forever (due to come into effect in spring 2023); and
• changes to how charities can amend their governing documents (due to come into effect in autumn 2023)

This page provides short summaries of the changes planned to come into force in autumn 2022.

We will publish updated guidance when the changes take effect.

Paying trustees for providing goods to the charity

Charities already have a statutory power that they can use, in certain circumstances, to pay trustees for providing a service to the charity beyond usual trustee duties, or goods connected to that service.

This statutory power is being changed by the Charities Act 2022. As a result, charities will be able to pay trustees in certain circumstances for just providing goods to the charity.

So, using the statutory power, trustees could be paid for:

• services only, for example estate agency or computer consultancy
• services and associated goods, for example plumbing or painting service and any associated materials such as plumbing parts or paint
• following implementation of the Act in autumn, goods only, for example supplying stationery to the charity

Making moral or ‘ex gratia’ payments from charity funds

Sometimes charity trustees receive a request to make a moral, or ‘ex gratia’, payment from their charity’s funds or property, or to waive their right to receive funds or property. This most frequently occurs when a charity receives a legacy and there is evidence that the donor had changed their mind since making their will.

The Charities Act 2022 will introduce new powers which will enable:

• charities, where trustees could reasonably be regarded as being under a moral obligation, to process requests for ‘small’ amounts without applying to the Commission, based on factors like annual gross income and the amount of the request (see the table below)
• trustees to delegate the decision-making for ex gratia payments to other individuals or groups within the charity. For example, the chief executive or a trustee sub-committee

These powers will also be available to Royal Charter and statutory charities.

The thresholds for enabling charities to use the new statutory power are set out in this table.

If the payment exceeds the amount set out in this table you must continue to apply to the Commission for authority to be able to proceed.

Fundraising appeals that do not raisereach, enough or raiseexceed, tooyour muchtarget

Sometimes, appeals do not raise the amount needed to deliver the aim you wanted, or raise too much so that there are funds leftover. Or circumstances may change and you cannot use the donations as you intended.

The Charities Act 2022 will reduce complexity surrounding what trustees need to do in these situations. For example:

• the current requirement in some circumstances for charities to wait six months for donors to ask for a refund will no longer apply
• there will be a simpler process for obtaining our authority; this will replace the need for the Commission to make a scheme
• if the donations that can be spent on new purposes (different to the purposes you raised them for) are less than £1000, trustees can act without the Commission’s involvement if they comply with the new legal requirements

Power to amend Royal Charters

These charities will be able to use a new statutory power to change sections in their Royal Charter which they cannot currently change, if that change is approved by the Privy Council.

Other provisions

Other changes planned to come into effect in autumn 2022.

The Act will:

• confirm that the Commission’s scheme-making powers include making schemes for charitable companies
• confer trust corporation status automatically to existing and future corporate charities in respect of any charitable trust of which the corporation is (or, in the future, becomes) a trustee
• update provisions relating to giving public notice to written consents and orders of the Charity Commission under various sections of the Charities Act 2011
• mean that when a charity changes its governing document by parliamentary scheme, under section 73 of the Charities Act 2011, the scheme will by default always be under a lighter touch parliamentary process (known as the negative parliamentary procedure)