UK-wide definition of charity rejected by Lord Hodgson

Monday, July 16, 2012

It was announced yesterday in Lord Hodgson’s review of the English and Welsh Charities Act 2006, Trusted and Independent: Giving charity back to charities, published on 16th July, that a single UK-wide definition of charity has been rejected “for the time being”.

Dealing with the Calman Commission’s recent conclusion that there should be a single, UK-wide definition, Lord Hodgson said that this was logically desirable, but that a large minority of respondents to his review were of the view that the “administrative irritation” of divergent definitions was a small price to pay for “diversity, flexibility and the upholding of principles of devolution.”

Writing from the English & Welsh point of view, Lord Hodgson states that “the differences only affect those operating in more than one jurisdiction”, but this ignores the fact that all Scottish charities must meet both the Scottish and English definitions of charity if they are to secure UK tax reliefs.

Given the challenge of agreeing and implementing a shared definition and the lack of appetite for change in the devolved administrations, Lord Hodgson’s conclusion is that the least worst option is the status quo – but that a single, UK-wide definition remains desirable in the longer term.

Commenting on Lord Hodgson’s report, Gavin McEwan, Deputy Head of Turcan Connell’s Charities Legal Team said, “It is disappointing that there has been no further move towards a single UK-wide definition of charity. While the differences are perceived to be minor and technical, they give rise to real practical difficulties for Scottish charities and for cross-border charities operating in Scotland. We therefore welcome Lord Hodgson’s comments that a move to a single definition is logical and desirable and should be revisited at a later date. We would encourage the Scottish Government to engage in that discussion at the appropriate time.”