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

Strengthening Scottish charity law: ICAS responds

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

16 February 2021

Main Points

  • The Scottish Government is seeking views on proposed changes to Scottish charity law.
  • The proposals focus on strengthening the powers of the Scottish charity regulator.
  • The ICAS Charities Panel is broadly supportive of the proposals.

The Scottish Government is continuing to gather views on its proposals to reform Scottish charity law via a public survey

The ICAS Charities Panel has responded to its online Scottish charity law survey.

Plans to reform aspects of the Charities and Trustee Investment (Scotland) Act 2005 have been in abeyance due to the COVID-19 pandemic. In 2019, an initial consultation with proposals largely focused on strengthening the powers of the Scottish charity regulator (OSCR) marked the beginning of this process.

Changes to the 2005 Act may be some months away but this survey demonstrates that charity law reform remains on the Scottish Government’s agenda.

Proposals consulted on via the survey are on the following topics:

  1. The publication of trustees’ annual reports and accounts for all charities on the Scottish Charity Register by OSCR.
  2. The creation of an internal database and an external register of charity trustees.
  3. Criteria for the automatic disqualification of individuals in senior management positions in charities.
  4. A power for OSCR to issue positive directions to charities.
  5. The removal of charities from the Scottish Charity Register for persistently failing to submit annual reports and accounts.
  6. A specific requirement for charities in the Scottish Charity Register to have and retain a connection in Scotland.

The publication of trustees’ annual reports and accounts

OSCR currently publishes or provides links to the trustees’ annual reports and accounts of charities with an income of over £25,000 and all Scottish Charitable Incorporated Organisations (SCIO) regardless of size.

As OSCR has no statutory requirement to publish these, data protection law requires OSCR to redact some personal information, which is a resource intensive exercise.

A statutory requirement to publish the annual reports accounts of all Scottish charities would increase the transparency of the sector and should enable OSCR to publish these without redaction. However, care still needs to be taken to ensure that certain information is not published; for example, sensitive information which could place persons at risk or personal information such as original signatures which could be forged.

ICAS has made some recommendations around the preparation and filing of trustees’ annual reports and accounts which will reduce or potentially eliminate the need for OSCR to redact any information.

The pandemic has also highlighted the need for guidance from OSCR around the signing of annual reports and accounts, including in relation to filed accounts. We have made a recommendation to this effect in our response to the survey.

The creation of an internal database and an external register of charity trustees

At present, the Scottish Charity Register records the principal office of the charity or the name and address of one of its trustees.

The Scottish Government is proposing that OSCR establishes a new register of trustees to provide valuable and relevant information to support OSCR’s regulatory activities. The proposals include:

  • An internal database of trustees for OSCR’s use. The internal database would include personal information about trustees such as dates of birth (for identification purposes) and home addresses. It could also include the names of any person removed as a trustee following an inquiry by OSCR under the 2005 Act or preceding legislation.
  • A reduced external register for public use. The external register would exclude personal information about trustees.

We are broadly supportive of these proposals.

Criteria for the automatic disqualification of individuals in senior management positions

Proposed changes to the 2005 Act include the automatic disqualification of both trustees and individuals in senior management positions. However, the survey seeks views on the criteria for the automatic disqualification of senior managers only.

It is likely that individuals performing specific roles, namely the Chief Executive Officer and Chief Financial Officer, will be caught by these proposals. The ability for OSCR to automatically disqualify a senior manager would relate to the role performed and not the individual’s job title.

We broadly support this proposal but legal provisions would need to framed in a way that OSCR could not be construed as acting as the employer. We have also recommended that consideration is given to including individuals in the Chief Operating Officer role.

A power for OSCR to issue positive directions to charities

OSCR has legal powers to issue specific types of direction to charities and charity trustees. Most of OSCR’s powers are preventative, requiring charity trustees or others not to take particular actions. OSCR cannot direct charity trustees to take a specified positive action to remedy non-compliance or protect charitable assets.

Both the Charity Commission for England and Wales and the Charity Commission for Northern Ireland have the power to issue positive directions.

While we support OSCR being given the power to issue positive directions, we believe that the power should be specific rather than general so that the independence of the charity sector from the public sector is maintained. Also, we believe that the power should only be used by OSCR following the conduct of an inquiry.

Removal from the Scottish Register for failing to submit annual reports and accounts

OSCR currently has the power to appoint someone to prepare a charity’s annual report and accounts, if its trustees fail to prepare and file these. We also support OSCR having a positive power of direction to compel trustees to prepare a trustees’ annual report and accounts.

We believe that these powers should be sufficient to address the issue of late reports and accounts. However, there may be extenuating circumstances which result in a continued failure, such as the loss of records in a fire, so some understanding of the circumstances should be considered before treating such a failure as trustee misconduct.

Charities to have and retain a connection in Scotland

For a charity to be registered in Scotland, an entity must have wholly charitable purposes and provide public benefit, but there is no requirement for the entity to have any connection to Scotland (with the exception of SCIOs). This means that OSCR may be compelled to register a charity that meets the charity test but has no activities in Scotland and no trustee connection with Scotland.

We comment that clarity could be provided by setting specific criteria which would enable OSCR to refuse registration or remove from registration any charity which does not have ‘a connection to Scotland’. In addition, we set out in our response what the criteria might be.

Before any changes are made to the 2005 Act to require all charities on the register to have ‘connection to Scotland’, we recommend that draft provisions are considered alongside the requirement for cross-border registration i.e. the requirement for a charity based elsewhere in the UK which has a presence in Scotland to register with OSCR.  This is to ensure that both these requirements are mutually compatible.

An element of future proofing should be considered within the definition for ‘connection to Scotland’. A charity’s presence can be ‘virtual’. Through the use of digital technology a charity without a physical presence could have Scottish beneficiaries or potential Scottish beneficiaries. However, the definition should not be cast so widely that any charity with a digital presence anywhere in the world could claim to have a ‘connection to Scotland’.

Next steps

It is likely that the proposed changes to the 2005 Act to strengthen OSCR’s powers will be made but the timing of these changes remains uncertain.

In our response to the Scottish Government’s 2019 consultation on Scottish charity law reform, we called for a full post-implementation review of the 2005 Act including a review of the 2006 Scottish charity accounting regulations.

We highlighted specific changes which are needed to the 2006 accounting regulations in light of experience, and we believe a post-implementation review is required to establish whether the 2005 Act as a whole is working as intended. No such review has been undertaken since the Act came into force in 2006, so a post-implementation review is required as a matter of good governance and good practice.

Scottish charity law reform: 14 years and counting

By Christine Scott, Head of Charities and Pensions

3 April 2019

Changes to accounting for multi-employer DB pensions

By Christine Scott, Head of Charities & Pensions

19 June 2019

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: