Fit and proper persons test breaches Compact says NCVO
June 2010
The NCVO has written to HMRC to point out that the 'fit and proper persons test' imposed by Sch. 6 of the Finance Act is in breach of the Compact and urges a full consultation as soon as possible
Here is the letter in full:
Lesley Strathie
Chief Executive and Permanent Secretary
Her Majesty’s Revenue and Customs
100 Parliament Street
London
SW1A 2BQ
1 June 2010
Dear Lesley Strathie,
I am writing in my capacity as Compact Advocate for the National Council for Voluntary Organisations (NCVO). The Compact is an agreement between the Government and the voluntary and community sector that provides a framework to improve the relationship between the two sectors for mutual advantage.
As the leading membership organisation representing the voluntary and community sector, NCVO has concerns over the process by which recent legislative changes have been made that will require charities to submit information to HMRC in relation to the ‘fit and proper persons test’.
As you will know part of government’s undertakings in relation to working with the voluntary and community sector is involving organisations in policy development.
Specifically, government has undertaken in the Compact to:
1.1 Involve the third sector from the earliest stages of policy development, on all relevant issues likely to affect it.
1.2 Inform the sector of progress in developing policy
1.3 Identify implications for the third sector when assessing the impact of new policies, legislation and guidance.
We are concerned that in this case HMRC, without having followed a consultation process as outlined in the Compact, have introduced new legislation and policies without the voluntary and community sector having any opportunity to have their voice heard. The new changes that have been introduced by HMRC will have real, practical and potentially serious consequences for organisations including an increased administrative burden and duplication of information being sent to HMRC and the Charity Commission.
The value of consultation is also laid out in HM Government’s Code of Good Practice on Consultation (which the HMRC have signed up to) which states that: “Effective consultation brings to light valuable information which the Government can use to design effective solutions. Put simply, effective consultation allows the Government to make informed decisions on matters of policy…”
Considering the above concerns over the lack of engagement with the voluntary and community sector over this decision and the impact that it will have on organisations, we ask that HMRC run a comprehensive consultation to enable all views to be taken into account in the development of this policy. This would not only be consistent with the Compact way of working that HMRC has undertaken to follow, but would also provide relevant and wide-ranging information allowing the Government to make informed decisions on this matter of importance for the voluntary and community sector.
I look forward to hearing from you and hope that a positive solution can be found on this matter.
Kind regards
Daniel Fluskey
Compact Advocacy Officer
020 7520 2460
cc Andrew Edwards, Head of Charity Policy
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