New rules on automatic disqualification of trustees and senior managers

From 1 August 2018 changes to the automatic disqualification rules mean that there will be more restrictions on who can run a charity. 

For most charities, taking some simple steps to update recruitment and appointment systems is all that will be needed to prepare for the rule changes. There is guidance on the website at:

Under current rules, a person is disqualified from acting as a charity trustee, if certain legal disqualification reasons apply to them.  These reasons are mainly bankruptcy related, and also include unspent convictions for crimes involving dishonesty or deception.

From 1 August 2018 there will be 2 key changes to the automatic disqualification rules:

  • an increase in the number of legal reasons that disqualify someone from acting as a trustee. The new reasons include being on the sex offenders register, and certain unspent convictions – such as for terrorism or money laundering
  • people who are disqualified from acting as a trustee are also disqualified from holding certain senior manager positions at a charity

Relevant senior manager positions are both Chief Executive (or equivalent) positions and Chief Finance Officer (or equivalent) positions. It is the function (and not the title) of the position that matters.

Your charity will need to check which, if any, posts qualify as senior manager positions under the new rules. The senior manager section of the automatic disqualification guidance explains what a senior manager is, for the purposes of the new rules.

A disqualified person can apply to the Charity Commission to waive their disqualification. They can do this at any time after they become disqualified.

People who will become disqualified by the automatic disqualification rule changes on 1 August 2018, can choose to apply for a waiver of their disqualification before the rules change. They can do this from 1 February 2018.

What to do next
Guidance on what to do to prepare and how to check whether people are disqualified under the new law is on the website:

The guidance also explains what to do if someone who is a trustee or senior manager becomes disqualified under the new law.

Checking official registers
Charities can make use of official registers which record the names of people who are disqualified from acting as charity trustees. These include:

The Individual Insolvency Register maintained by the Insolvency Service, which contains details of:

  • bankruptcies that are either current or have ended in the last 3 months
  • current individual voluntary arrangements and fast track voluntary arrangements
  • current bankruptcy restriction orders and undertakings

Searches of the Register can be made on the Insolvency Service website, by visiting your local Official Receiver’s office, or by post or fax.

The register of disqualified directors maintained by Companies House. Searches of the register can be made on the Companies House website.

The register of all persons who have been removed as a charity trustee either by the commission or by an Order of the High Court since 1 February 1993.