The Scottish Government has responded to a consultation that it published on proposed changes to Scottish charity law, that may see charities registered in Scotland required to have and retain a connection to Scotland.

At present, unless a charity is a Scottish Charitable Incorporated Organisation (SCIO), there is no requirement for a charity applying to be added to the register of charities in Scotland to have any connection to Scotland, such as occupying any premises in Scotland, or carrying out any activities or having any trustees living there.

OSCR, the regulator for charities in Scotland, sees this as a potential problem for its effective regulation of charities. The absence of a connection may result in OSCR more easily losing touch with a charity, and can also make it difficult for OSCR to check what activities are being carried out by a charity and whether a charity is complying with the public benefit requirement. Respondents to the consultation were asked whether it would be appropriate for all charities registered in Scotland to have and retain a connection with Scotland.

The consultation stated that this new requirement would not preclude “cross border registration” in Scotland, which can be necessary for charities founded in England and Wales in a number of circumstances.

For example, at present, if an English charity represents itself as a charity in Scotland, this would result in a need to register with OSCR. Such representation arises where a charity or person acting on behalf of a charity makes a public reference (written or verbal) to an organisation being a charity, and might occur, for example, in an application for grant funding or for rates relief.

Charities registered in England and Wales (currently) might have to register with OSCR if they are:

• established under Scots law,
• managed or controlled wholly or mainly in Scotland,
• occupy any land or premises in Scotland; or
• carry out activities in any premises in Scotland.

Besides proposing that a charity registered in Scotland should have and retain a connection to Scotland, the consultation also addressed a number of other issues with Scottish charity law identified by OSCR.

The proposals in the consultation were generally intended to increase transparency, accountability and trust in the sector, and in some cases have the effect of bringing the legislation in Scotland into line with that in England and Wales. Some proposals involve giving OSCR certain powers it doesn’t currently have, such as the proposal to give OSCR a new explicit power to publish annual reports and accounts of all charities in full, including personal information (with the exception of signatures), on the Scottish Charity Register.

This helpful consultation summary was sourced from Tori Spratt, Professional Support Lawyer for Mills & Reeve here