Charities exempt from ICO fees ‘likely to remain so under GDPR’

Paul Arnold, deputy chief executive of the Information Commissioner’s Office, reveals this on the ICO website, but it has yet to be confirmed by ministers

Charities that are exempt from paying fees to the Information Commissioner’s Office are likely to remain exempt under the new fee structure due to be introduced under the General Data Protection Regulation, the regulator has said.

The ICO has said it is recalculating the fees it charges data controllers to notify the regulator of how and why they are collecting data, something data controllers are required to do under the Data Protection Act 1998.

Data controllers must currently pay a notification fee of £35 or £500, depending on the size of the organisation, but many charities are exempt from the rules unless they sell or swap data with other organisations or they own their own premises and operate CCTV on them.

The GDPR, new data protection legislation due to come into force on 25 May 2018, says that data controllers will no longer be required to notify the ICO.

But Paul Arnold, deputy chief executive of the ICO, said in a statement on the ICO website today that such organisations would still be required to pay the ICO once the GDPR was introduced because they would switch to paying a data protection fee, which was introduced by this year’s Digital Economy Act.

The fees would be used to fund the ICO’s work, Arnold said.

He said the ICO expected those organisations that were exempt under the existing regime would remain exempt under the new system, but this had yet to be confirmed by the Department for Digital, Culture, Media & Sport.

In the statement, he said: “The amount of the data protection fee is being developed by the ICO’s sponsoring department, the DCMS, in consultation with the ICO and representatives of those likely to be affected by the change. The final fees will be approved by parliament.”

Arnold said the size of the data protection fee each organisation was required to pay would still be based on the organisation’s size and turnover and would take into account the amount of personal data it was processing.

There were likely to be three categories of fees, he said, but he did not give an indication of how much these fees were likely to be.

The new model would come into force in April, Arnold said, but added that any notification fees would remain valid for a year, so charities would not need to pay the data protection fee until their current fee expired.

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Amount paid in audit fees by top 5,000 charities rises by more than £2m

A new report from the data firm Charity Financials also shows Crowe Clark Whitehill earned the most in fees in the past year

The overall amount paid out in audit fees by the top 5,000 charities has increased by 4.4 per cent, according to a new report.

The data provider Charity Financials’ Charity Audit Spotlight for 2017, which is based on scrutiny of the latest accounts for the 5,000 largest UK charities, shows that audit fees cost them a total of £69.4m.

In comparison, last year’s Charity Audit Spotlight showed that the UK’s largest charities paid more than £67m in audit fees, which was itself a 2.5 per cent increase on the previous year. 

The report found that the audit firm Crowe Clark Whitehill has the largest market share, earning £5.7m in fees and accounting for 8.2 per cent of the market.

PricewaterhouseCoopers earned more than £4.6m in fees from charities and BDO earned almost £4.5m, the report says.

But rival audit firm haysmacintyre had the most charity clients in the top 5,000 with 263, followed by CCW with 240 and RSM with 236.

Haysmacintyre also gained the most new clients for the second year running, the report shows, with 30 charities appointing the firm and paying fees worth a combined £449,000.

The report says that while 328 charities changed auditor in their latest set of accounts, 27 per cent of the top 5,000 charities have not changed their auditor in the past decade.

The largest charity to change auditor was the Wellcome Trust – which is the UK’s richest charity – which paid Deloitte £300,000 to audit its latest set of accounts, the report says.

PwC audits the largest amount of charity income, the report shows, with £5.65bn scrutinised by the firm this year.

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Supreme Court ruling on employment tribunal fees ‘not great news for charities’

Lawyers say the ruling that the fees are unlawful will lead to increasing numbers of ‘try-on’ claims

The Supreme Court ruling that the fees charged for people to bring employment tribunal claims are unlawful will lead to an increase in the number of cases brought against charities, lawyers have warned.

In 2013, the government introduced fees of up to £1,200 for people to bring employment tribunal claims in a bid to reduce the number of spurious cases faced by employers. There was previously no charge for bringing a case.

The fees, which led to a dramatic fall in the number of claims dealt with by employment tribunals, were yesterday ruled unlawful by the Supreme Court after a challenge brought by the trade union Unison, which said they prevented workers from accessing justice.

William Garnett, a partner in the employment department at the law firm Bates Wells Braithwaite, said he thought the ruling would lead to an increase in the number of spurious “try-on” claims against charities.

“This is not great news for employers in the third sector,” he said. “The reason is that, arguably, people on lower rates of pay were disproportionately disadvantaged by the fees regime. The third sector has a lot of low-paid people.”

Garnett said charities might be seen as soft targets for employees trying to bring employment tribunal claims because organisations would be keen to protect their reputations and therefore more likely to want to settle cases.

“It is a sector that does get taken advantage of,” he said. “Of course there are a lot of genuine claims, but there are a lot of spurious ones also.”

Nick Le Riche, a partner in the employment team at the law firm Bircham Dyson Bell, agreed that the ruling would lead to an increase in the number of claims against charities and said the ruling might result in people trying to bring claims that were otherwise out of time.

They might argue that under the old fees structure they could not afford to bring the case in the time allowed, he said, and argue that the claim should be allowed in the new environment.

But both Garnett and Le Riche said they thought the government would try to reintroduce a new charging regime.

Garnett said the Supreme Court had not ruled that any fees were unlawful, just the fee structure previously implemented.

“This is not the end of the story,” he said. “I’m sure the government will be back with a new fees regime.”

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