ICAS ICAS logo

Quicklinks

  1. About Us

    Find out about who we are and what we do here at ICAS.

  2. Find a CA

    Search our directory of individual CAs and Member organisations by name, location and professional criteria.

  3. CA Magazine

    View the latest issues of the dedicated magazine for ICAS Chartered Accountants.

  4. Contact Us

    Get in touch with ICAS by phone, email or post, with dedicated contacts for Members, Students and firms.

Login
  • Annual renewal
  • About us
  • Contact us
  • Find a CA
  1. About us
    1. Governance
  2. Members
    1. Become a member
    2. Newly qualified
    3. Manage my membership
    4. Benefits of membership
    5. Careers support
    6. Mentoring
    7. CA Wellbeing
    8. More for Members
    9. Area networks
    10. International communities
    11. Get involved
    12. Top Young CAs
    13. Career breaks
    14. ICAS podcast
    15. Newly admitted members 2022
    16. Newly admitted members 2023
  3. CA Students
    1. Student information
    2. Student resources
    3. Learning requirements
    4. Learning updates
    5. Learning blog
    6. Totum Pro | Student discount card
    7. CA Student wellbeing
  4. Become a CA
    1. How to become a CA
    2. Routes to becoming a CA
    3. CA Stories
    4. Find a training agreement
    5. Why become a CA
    6. Qualification information
    7. University exemptions
  5. Employers
    1. Become an Authorised Training Office
    2. Resources for Authorised Training Offices
    3. Professional entry
    4. Apprenticeships
  6. Find a CA
  7. ICAS events
    1. CA Summit
  8. CA magazine
  9. Insight
    1. Finance + Trust
    2. Finance + Technology
    3. Finance + EDI
    4. Finance + Mental Fitness
    5. Finance + Leadership
    6. Finance + Sustainability
  10. Professional resources
    1. Anti-money laundering
    2. Audit and assurance
    3. Brexit
    4. Business and governance
    5. Charities
    6. Coronavirus
    7. Corporate and financial reporting
    8. Cyber security
    9. Ethics
    10. Insolvency
    11. ICAS Research
    12. Pensions
    13. Practice
    14. Public sector
    15. Sustainability
    16. Tax
  11. CPD - professional development
    1. CPD courses and qualifications
    2. CPD news and updates
    3. CPD support and advice
  12. Regulation
    1. Complaints and sanctions
    2. Regulatory authorisations
    3. Guidance and help sheets
    4. Regulatory monitoring
  13. CA jobs
    1. CA jobs partner: Rutherford Cross
    2. Resources for your job search
    3. Advertise with CA jobs
    4. Hays | A Trusted ICAS CA Jobs Partner
    5. Azets | What's your ambition?
  14. Work at ICAS
    1. Business centres
    2. Meet our team
    3. Benefits
    4. Vacancies
    5. Imagine your career at ICAS
  15. Contact us
    1. Technical and regulation queries
    2. ICAS logo request

Scottish charity law reform: 14 years and counting

  • LinkedIn (opens new window)
  • Twitter (opens new window)
By Christine Scott, Head of Charities and Pensions

3 April 2019

Key points:

  • The Scottish Government is undertaking a limited review of Scottish charity law.

  • The ICAS Charities Panel recommends a more comprehensive review is undertaken.

  • The proposals focus on improving transparency and increasing OSCR’s powers.

It’s been nearly 14 years since the Charities and Trustee Investment (Scotland) Act 2005 received Royal Assent, implementing for the first time comprehensive arrangements for the registration and regulation of Scottish charities.

A comprehensive post-implementation review of the 2005 Act is long overdue and unfortunately, the Scottish Government’s 2019 consultation on charity law reform falls far short of being comprehensive.

In its response to the consultation, the ICAS Charities Panel has called for the review to be extended before parliamentary time is set aside to scrutinise any changes.

The proposals focus on improving transparency and increasing the powers of the Office of the Scottish Charities Regulator (OSCR). However, they do not address some long overdue changes to the Scottish charity accounting regulations.

Publication of trustees’ annual reports and accounts

Proposals would place the online publication of charity trustees’ annual reports and accounts by OSCR on the Scottish Charity Register on a statutory basis.

At present, OSCR publishes or provides links to annual reports and accounts for all Scottish Charitable Incorporated Organisations (SCIOs) and other charities with an annual income of £25,000 or more.

With no statutory requirement to publish annual reports and accounts, OSCR must redact original signatures, prior to publication.

The Charities Panel supports the publication by OSCR of the annual reports and accounts of all Scottish charities as this will make it easier for stakeholders including members of the public to access these.

We also recommend that there should be mechanisms available to exclude sensitive personal and other data from a charity’s trustees’ annual report and accounts.

For example, in the case of signatures, we recommend that OSCR’s filing requirements permit charities to file accounts with printed signatures provided the charity maintains an original signed copy on file.

Register of charity trustees

Proposals for creating an internal database of charity trustees and a public register are mooted.

An internal database to record information on 180,000 plus trustees of Scottish charities would be intended to support OSCR’s regulatory activities and improve engagement with charities. Currently, the law only requires the Charity Register to record the address of a charity’s principal office and the name and address of one of its trustees.

The purpose of the public register would be to increase transparency and accountability to the public. The information published would be limited to the address of a charity’s principal office and the names of its trustees.

It will be necessary, as is currently the case in respect of the Scottish Charity Register, to ensure that sensitive personal and other data is excluded from the public register where there is a need to protect the security of a charity’s premises, beneficiaries, staff or trustees.

Governance arrangements will need to be robust to ensure that personal data is protected and that personal data is only held where there is a clear purpose for doing so. Personal data on former trustees should only be held for a specified period of time.

Increased powers of direction

OSCR’s powers are largely interdictory or preventative, requiring trustees or others not to take particular actions. OSCR can’t direct charity trustees to take specific positive action to remedy non-compliance with charity law or protect charitable assets. The consultation is seeking views on whether OSCR should be given the power to issue positive directions.

The Charities Panel supports specific rather than general powers to issue positive directions as it is vital that the independence of the charity sector is maintained.

The power to issue positive directions should ensure that their use is proportionate and distinct from the powers of the Court of Session. Positive directions should only be used by OSCR following the conduct of reasonable inquiries. OSCR should also have the ability to amend or repeal a positive direction where new information comes to light or circumstances change.

New powers in relation to third parties

Proposals are set out on the introduction of new measures to maintain trust in the charity sector and to protect charitable assets in circumstances where someone has been disqualified as a trustee or where a non-charitable entity holds charitable assets.

Possible new powers for OSCR include, the power to:

  • Publish, in a public register, the names of former trustees who have been disqualified from holding office following an inquiry by OSCR.

  • Make inquiries into former trustees of a body which is no longer a charity, a charity which has ceased to exist and individuals who were in management and control of a body which is no longer controlled by a charity.

  • Power to give the required notice of a request for information to a body or individual that is misrepresenting themselves as a charity, that is no longer a charity, and to former trustees of a charity which has ceased to exist.

The Charities Panel is generally supportive of these proposals.

Areas for further reform

There are several matters relating to Section 44 on charity accounts and the Charities Accounts (Scotland) Regulations 2006 (the Scottish charity accounting regulations) which require reform including the following:

  • Amendments are needed to make it clear that the trustees’ annual report is not part of the statement of account. We believe that the policy intention is that a consistency check between the trustees’ annual report and the accounts is all that is required.

  • References to specific editions of Statements of Recommended Practice (SORPs) for charities including specialist charities (i.e. housing and education bodies) in the Scottish charity accounting regulations should be removed to make them ‘edition neutral’. SORPs do not take precedence over UK financial reporting standards and there is no benefit in the way of higher quality accounts for charities bound to a specific edition of a SORP, if amendments have been made to the underlying standards.

  • There have been several amendment regulations issued in relation to the Scottish charity accounting regulations and it would be timely to issue consolidated regulations. Amendments include changes to thresholds for accounts preparation and external scrutiny and it would be clearer for charities and their advisers if all the changes made to the regulations since they were published in 2006 were included in one set of updated regulations.
  • OSCR has no power to issue directions to independent examiners, i.e. steps an independent examiner must undertake in order to be able to prepare their independent examiner’s report. This power is available to the Charity Commission for England and Wales and the Charity Commission for Northern Ireland and has the potential to improve the quality of independent examinations of Scottish charities.

The Charities Panel also made recommendations about:

  • Section 35, where regulations to implement asset transfer schemes have never been issued.

  • Section 67 where restrictions on the remuneration of trustees create complexity around the remuneration of insolvency practitioners.

  • Section 16 where changes requiring OSCR consent are incompatible with the duties of company directors of charitable companies facing severe financial distress or insolvency.

  • Regulations made under section 64 about the winding up, insolvency or dissolution of a SCIO where insolvency practitioners cannot act as trustees in SCIO sequestrations.

Guidance for ICAS members acting for Scottish charities

By ICAS Charities Panel

21 November 2019

Auditor's report guidance for ICAS firms acting as auditors of Scottish charities

By The ICAS Charities Panel

28 March 2022

ICAS logo

Footer links

  • Contact us
  • Terms and conditions
  • Modern slavery statement
  • Privacy notice
  • CA magazine

Connect with ICAS

  • Facebook (opens new window) Facebook Icon
  • Twitter (opens new window) Twitter Icon
  • LinkedIn (opens new window) LinkedIn Icon
  • Instagram (opens new window) Instagram Icon

ICAS is a member of the following bodies

  • Consultative Committee of Accountancy Bodies (opens new window) Consultative Committee of Accountancy Bodies logo
  • Chartered Accountants Worldwide (opens new window) Chartered Accountants Worldwide logo
  • Global Accounting Alliance (opens new window) Global Accounting Alliance
  • International Federation of Accountants (opens new window) IFAC
  • Access Accountancy (opens new window) Access Acountancy

Charities

  • ICAS Foundation (opens new window) ICAS Foundation
  • SCABA (opens new window) scaba

Accreditations

  • ISO 9001 - RGB (opens new window)
© ICAS 2022

The mark and designation “CA” is a registered trade mark of The Institute of Chartered Accountants of Scotland (ICAS), and is available for use in the UK and EU only to members of ICAS. If you are not a member of ICAS, you should not use the “CA” mark and designation in the UK or EU in relation to accountancy, tax or insolvency services. The mark and designation “Chartered Accountant” is a registered trade mark of ICAS, the Institute of Chartered Accountants of England and Wales and Chartered Accountants Ireland. If you are not a member of one of these organisations, you should not use the “Chartered Accountant” mark and designation in the UK or EU in relation to these services. Further restrictions on the use of these marks also apply where you are a member.

ICAS logo

Our cookie policy

ICAS.com uses cookies which are essential for our website to work. We would also like to use analytical cookies to help us improve our website and your user experience. Any data collected is anonymised. Please have a look at the further information in our cookie policy and confirm if you are happy for us to use analytical cookies: