EU Referendum: What could this mean for charities?

June 6, 2016 at 17:10

As the 23rd June appears closer and closer this Europe’s Final Countdown song has never felt more relevant as the UK public decides whether they will be voting to remain or leave European Union (EU).


6755068753_6e8558ae43_mWhile we all wish that major political events can be guided by the power of 1980’s glam rock, unfortunately for the UK’s charity sector no such song exits.  For the sector the EU referendum presents a number of unknowns, which could present serious risks for charities.

Though each charity will have a different and often complex relationship with the EU, it is important that all charities are aware of any potential changes they  could face. Charities need to engage with areas within their organisation that depends on pre-existing EU regulation to be able to help their beneficiaries and  donors in an unprecedented situation.

CFG has written, with contribution from our corporate partners in areas of their expertise, a briefing providing a technical analysis of the possible financial and regulatory consequences for the charity sector in the face of the EU referendum.

The briefing covers key points in:
• Employment law and HR
• EU funding for charities
• VAT and tax
• Accounting and reporting
• Data protection
• Pensions law
• Issues for charities in devolved nations
• Broader EU issues facing charities

This briefing and CFG do not argue for or against whether Britain should remain within the EU. Instead we urge charities to assess the risk that either result in the EU referendum could have on their charities operation, governance and finance. Each charity in the UK will interact with the EU in a different way, so there cannot be a one size fit all approach to the referendum.

If Britain votes for a Brexit instantaneous change is very unlikely to occur. Under the Treaty on European Union (Article 50) a country that votes to leave the EU is given a two year period for negotiations. During this period EU laws would still apply within the UK. However, the role of EU laws within various UK legislation are complex and myriad meaning that charities should prepare early for any change in legislation that might affect them. Charities should also be aware that a remain vote in the referendum could bring potential changes as David Cameron tries to introduce the negotiated settlement he made with the EU in February 2016.

Ultimately how the referendum will impact on the charity sector cannot be predicted with 100% certainty. It is up to charities to use the knowledge at their disposal to plan accordingly.

You can download the briefing on the CFG website.