charity The Reeves newsletter designed to help keep you
up to date with developments affecting charities
Looking a gift horse in the mouth
Since 2008, law firms in possession of money belonging to clients who can’t be traced have been able to
donate it to charity. The donation is now allowed following modifications to Rule 22 of the Solicitors’ Accounts
Rules (SAR). However, the donation may come with strings attached. The lawyer may ask the charity to give
an indemnity. If the rightful owner should ever reappear and want their money, the charity then has to repay
the lawyer. The risk is with the charity and if a tidy sum is at stake, the consequences could be embarrassing.
The lawyer should only ask for an indemnity if they have been instructed to
do so by their regulator, the Solicitors Regulation Authority (SRA). There is no
automatic requirement in the SAR and this point is not always properly
appreciated. Small donations of up to £50 per client never require an
Senior Manager, Reeves Trustees need to actively consider if they are happy for their charity to
provide indemnities. To do so means the donation is not an absolute and
unconditional gift, it comes with the contingent liability of repayment which, granted, may be only a remote
possibility. If the trustees are content then it would be sensible to first ask the lawyer for sight of the SRA’s written
authorisation under the relevant rules of the SAR and for precise details (original date it arose, ownership, amount) of the
money being donated, if not already set out in the SRA’s authority.
The wording of the indemnity itself needs some careful thought to make sure the extent and circumstances of the charity’s
potential liability is adequately defined and ring-fenced. We can provide advice and guidance on any of these matters.
Last, trustees might also wish to consider pre-emptive action and contact their local solicitors to actively beg their unclaimed
Charity Sector Breakfast Seminars
This Summer Reeves are joining Furley Page to offer seminars for charity CEO’s and Finance Directors with the theme of “Reducing Risk”. The
seminars will be held in the morning on 9th June (Canterbury), and 22 June (Chatham Historic Dockyard). Susan Robinson (Reeves Head of
Charities) will be joining expert speakers from Furley Page to present on a range of subjects affecting charities. If you are interested in
attending, please see www.furleypage.co.uk and go to their events page, or email email@example.com with your details.
Challenges facing the society
Throughout the history of the Kent County Agricultural Society the core values have remained the same; to
educate the public about farming, farmers and the countryside. Each decade threw up its own challenges
but since its formation in 1923, there has never been a more challenging time than the new millennia.
The obvious pressures on the third sector started with the Charity Commission; prior to this time small or
large groups were able to do their ‘good works’ with little cross examination. A move to regulate the sector
was important to ensure that all charities were delivering what they set out to do. Constitutions and
memoranda were scrutinised by experts and at great cost to the individual charity, were deemed future
proof. To ensure the longevity of the Society, the Kent Event and Exhibition Centre was formed to support
the Charity’s finances and to look after the interests of the growing number of outside lets. The
Showground’s unique selling point is size and location, it is between two major motorways and within
Glyn Charlton 50mins car or train journey from London and has a choice of meeting rooms, conference facilities and
Honorary Finance exhibition space.
Agricultural Society The Agricultural Society’s objects have changed relatively little over the decades. The holding of an
Agricultural Show for the exhibition of livestock, farm and horticultural produce, machinery and other things
pertaining to Agriculture has been the Society’s main activity and it will be holding its 82nd Show in July 2011. One of the other key objectives
of the Society is the encouragement of agricultural and horticultural education. This more than ever is vital for the growing community who
seem to drift further and further away from the land based sector.
The Society has endeavoured to address many aspects of education and partners with a number of organisations to help promote the ideal of
field to fork. The Living Land event for 3,000 primary school children started in 2004 and has proved not only popular with Kent schools but
showcases many aspects of the rural sector that young people would not necessarily have contact with; beekeeping, forestry, traditional
crafts and steam engines. The Society is looking to host the first skills and career day ‘Farming Futures’ for secondary school children in
October 2011 This will be an incredibly important event with the number of agricultural workers needed in the industry rising dramatically.
The current Government has championed ‘The Big Society’ with the idea that empowering communities and encouraging new Social
Enterprises or Community Interest not-for-profits will deliver us from evil. The coalition government sees charities as being able to challenge
the public sector’s grip on government. But how will the voluntary sector be able to compete and innovate at a time when steep cuts in
Whitehall budgets mean they will face a profound funding crisis?
If charities want to be the answer to helping build “big society” they need to get serious
about demonstrating their impact. This is the challenge that faces the Kent County
Agricultural Society. We are using more innovative ways to promote the County Show and
for the first time are offering visitors really meaningful advance booking discounts. The
new website www.kentcountyshow.co.uk allows visitors to have all the information they
need to make an informed decision about the event. A new viral microsite has been
commissioned that will interact with the community through facebook and twitter.
The Showground needs to embrace all these changes, move with the economic climate
and continue to look forward with new building programmes. We need to re-establish links
with the wider community and ensure that visitors to the Annual Show are inspired to learn
just a little bit more about the countryside around them.
For more information on the exhibition/conference facilities we have to offer, please contact Alison Wallington on 01622 630975.
Don’t bury your head in the sand...
...consider whether your charity’s volunteers are
covered by anti discrimination legislation?
Guest contribution from Sian Stubberfield,
Employment Law Solicitor at Furley Page LLP.
A recent ruling from the Court of Appeal in the case of X v
Mid Sussex Citizens Advice Bureau held that an unpaid volunteer was not protected by anti
discrimination legislation. This judgement may, on first reading, elicit sighs of relief from nervous and
cash strapped charities, understandably worried about the potential liabilities which may result from
enlisting the help of volunteers. However, as the Court of Appeal stated, some volunteering
arrangements will attract protection from anti-discrimination legislation. Charities are therefore urged to
consider the judgement, and their own charity’s volunteer arrangements with care.
Solicitor, Furley Page LLP The Claimant in this case applied to be a volunteer with the Citizens Advice Bureau (‘CAB’) in April 2006,
and signed a volunteer agreement. The agreement was stated to be ‘binding in honour only… and not a
contract of employment or legally binding.’
The Claimant failed to turn up to volunteer between 25-30% of the times when she was expected, and on other occasions she changed her
volunteering days. After a period of time, the Claimant was asked to cease volunteering. She subsequently brought a claim against the CAB
for disability discrimination under the Disability Discrimination Act 1995 (now repealed and replaced by the Equality Act 2010).
The Employment Tribunal held that the Claimant was not entitled to bring a claim under the DDA, as although she is ‘disabled’ under the
meaning of the act, there was no legally binding contract between the Claimant and the Respondent – the Claimant did not therefore meet the
definition either of an ‘employee’ or the wider definition of a ‘worker’.
In addition, the Employment Tribunal rejected the Claimant’s argument that she attracted protection under section 14C of the DDA as she had
been on a ‘work placement’ whilst volunteering at the CAB as the dominant or sole purpose of the arrangement was in fact to give advice to
members of the public.
The Employment Tribunal made a further finding that the volunteering arrangement between the
parties was not part of any arrangement by the CAB to decide who should be offered
employment. This was because although some 80% of paid CAB advisers were unpaid
volunteers initially, all paid posts were advertised externally and volunteers were not given any
The Claimant then unsuccessfully appealed to the Employment Appeal Tribunal (‘EAT’). The EAT
rejected the Claimant’s argument that she should be protected under the originating European
legislation on the basis that as a volunteer, she had an ‘occupation’ under the wording of the
The Claimant’s appeal to the Court of Appeal was also unsuccessful, the Court of Appeal rejecting
the Claimant’s argument that she was protected under the originating European legislation
because she was undertaking ‘vocational work’ by volunteering and was therefore a ‘worker’.
Although this particular case concerned disability discrimination, charities should remember that a
volunteer protected from one strand of anti-discrimination law would also be protected from the
other strands - racial or ethnic origin, sex, sexual orientation, religion or belief, and age.
Although in this case, the Court of Appeal held that the volunteer in question was not entitled to
protection from anti –discrimination legislation, it is emphasised that in other circumstances, a volunteer could potentially be protected.
Charities should therefore review their existing arrangements carefully and take specialist advice where required. Charities may wish to
consider the following:
• The title given to written agreements with volunteers;
• Whether any written agreement between the charity and volunteer implies the existence of a legally binding contract;
• Whether volunteers are given job descriptions;
• What, if any, training volunteers are given
For further information, please contact Sian Stubberfield on 01227 863 185 or by email firstname.lastname@example.org
How do I show my stuffed giraffe on the
Financial Reporting Standard 30 providing guidance on the accounting treatment of Heritage Assets came
into force for accounting periods beginning on or after 1 April 2010, and thus the majority of charities will be
applying this standard for the first time when they prepare their 2011 accounts. This standard builds upon
existing accounting guidance and disclosure requirements set out in the Statement of Recommended
Practice for charity accounting that have existed for several years now, with its objective to encourage
bodies such as museums, galleries and zoos to include their collections in the accounts. Generally up to
now collections have been either omitted from the accounts or, at best, accounted for at nominal amounts.
The Standard defines a heritage asset as “a tangible asset with historical, artistic, scientific, technological,
geophysical or environmental qualities that is held and maintained principally for its contribution to
Peter Barton knowledge and culture.” The Standard requires all heritage assets to be included in
Senior Manager an entity’s accounts, either in the balance sheet at fair value or by way of a note
explaining the assets held by the entity.
So, how do you value your heritage assets? FRS 30 states that “valuations may be made by any method that is
appropriate and relevant.” Not particularly helpful. Any reasonable basis can be used for the valuation, which can
be undertaken internally or externally. It may be appropriate to include an item at cost if it was acquired recently
but where reliable cost information is not available, such techniques as are appropriate should be used to value
the asset. If an asset cannot be reasonably valued, it should be excluded from the balance sheet and be
disclosed by way of note only.
Clearly, this is a complicated area and one that will only affect a small number of charities. If this affects you, your
usual Reeves contact will be in touch to discuss the best approach. This will either be full disclosure in the balance sheet
at fair value, or a detailed note of heritage assets held with the reasons why they cannot be accurately valued.
Gift Aid Transitional Relief
Gift Aid Transitional Relief was introduced on 6 April 2008 following a drop in the basic rate of income tax from 22% to 20%. This relief has
been withdrawn with effect from 5 April 2011 and, as a result, charities can now only reclaim basic rate tax on Gift Aided donations at a rate of
25% of the net gift. Therefore, a Gift Aided donation of £1,000 will now be worth £1,250 to the charity rather than £1,280.
Reeves is one of the major accountancy and financial services firms practising in the south east of England. Established
over 100 years ago in London, we have built a growing reputation for our award winning tax and financial advice. Today
we have offices in Kent, London and Gatwick and we employ over 300 staff including over 40 partners. The firm’s charity
group has over 30 specialist members, and is headed up by Susan Robinson. Four members of the team have also been
awarded the ICAEW Diploma in Charity Accounting, therefore strengthening our credentials.
No responsibility for loss occasioned to any person acting or refraining from action as a result of information within this
newsletter can be accepted by Reeves.
For more information about our charity group, or any other service, visit our website: www.reeves.co
Reeves & Co LLP (the Firm) is a Limited Liability Partnership registered in England and Wales with registered number OC328775. Registered to
carry on audit work and regulated for a range of investment business activities by The Institute of Chartered Accountants in England and Wales.
Registered office: 37 St Margaret’s Street, Canterbury CT1 2TU.
Reeves Financial Planning Limited, which is wholly owned by the Firm, is authorised and regulated by the Financial Services Authority. Registered
in England and Wales with registered number 03852054. Registered office: 37 St Margaret’s Street, Canterbury CT1 2TU.
Reeves Investment Management Limited, which is wholly owned by the Firm, is authorised and regulated by the Financial Services Authority.
Registered in England and Wales with registered number 01202398. Registered office: Third Floor, 24 Chiswell Street, London EC1Y 4YX.