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Charities (Disclosure of Revenue and Customs Information to the Charity Commission for Northern Ireland) Regulations 2010

My Lords, these regulations provide a statutory gateway for the sharing of information between Her Majesty’s Revenue and Customs and the recently established Charity Commission for Northern Ireland, mirroring the information-sharing gateways that are already in place between HM Revenue and Customs and the other UK charity regulators. The current position for organisations in Northern Ireland seeking recognition as a charity is that they can apply to HM Revenue and Customs to be recognised as a charity for tax purposes. Approximately 7,500 organisations in Northern Ireland are recognised by HMRC as such. However, the regulatory landscape for charities in Northern Ireland is undergoing a major change under the Charities Act (Northern Ireland) 2008 passed by the Northern Ireland Assembly. One of this Act’s main reforms is the establishment of the Charity Commission for Northern Ireland as the first independent registrar and regulator of charities in the Province. Although the Charity Commission for Northern Ireland was formally established last year, it has yet to take on most of its functions, which are set out in the Charities Act (Northern Ireland) 2008. Two commencement orders have been made to date and these have provided for the establishment of the commission, consultation on public benefit guidance, the definition of charity and charitable purpose, and the establishment of the Charity Tribunal for Northern Ireland. A further commencement order is scheduled to be introduced in April 2010 to provide for registration of charities in Northern Ireland and to allow the commission to conduct investigations. In order for the Charity Commission for Northern Ireland to take on its functions and begin registering charities, it needs the basic information that HMRC holds on organisations in Northern Ireland which have been recognised as charities for tax purposes. While charity law is a devolved matter in Northern Ireland, taxation is not. Matters relating to charity taxation and tax reliefs are reserved to the United Kingdom Government in Westminster, and operational responsibility falls to HMRC. This is why the provisions establishing the information-sharing gateway between HMRC and the Charity Commission for Northern Ireland were not included in the Charities Act (Northern Ireland) 2008 and why the power to make these regulations was, instead, included in the Charities Act 2006. The regulations will allow HMRC to share information with the Charity Commission for Northern Ireland for the purpose of enabling or assisting it to discharge any of its functions. The power in Section 72 of the Charities Act 2006 under which these regulations are made is very narrow; in effect, it requires the information gateway between HMRC and the Charity Commission for Northern Ireland to mirror the provisions of that which already exists between HMRC and the Charity Commission for England and Wales in Section 10A of the Charities Act 1993. This means that the information shared by HMRC is subject to an automatic prohibition against onward disclosure unless such onward disclosure is explicitly authorised by HMRC. Unlawful disclosure is an offence, although a defence is provided where the disclosure was reasonably believed to be lawful or where the information had already lawfully been made available in the public domain. These features are the same as in the information-sharing provisions which apply to HMRC staff in Section 18 of the Commissioners of Revenue and Customs Act 2005 and the information gateway which has been established between HMRC and the Office of the Scottish Charity Regulator. The Charity Commission for Northern Ireland and HMRC have been working together and have developed a memorandum of understanding covering the practical arrangements for sharing information and for working together in the future. This is expected to be approved next month. Once the information gateway is in place, HMRC will provide the Charity Commission for Northern Ireland with contact details for all Northern Ireland charities registered for tax purposes. This will be an electronic exchange of information with due regard for information security. These data will be used by the Charity Commission for Northern Ireland to contact charities in Northern Ireland inviting them to register with the commission. In future, there is expected to be a two-way flow of information between the Charity Commission for Northern Ireland and HMRC—for example, about charities that appear to be engaging in non-charitable activities or incurring non-charitable expenditure—to assist each of those bodies in exercising their functions. The mission of the Charity Commission for Northern Ireland is to introduce a regulatory framework for the charitable sector in Northern Ireland in line with developments in the rest of the UK and Ireland. This will provide a structure and process through which charities can demonstrate their contribution to society, the public can be assured regarding how charities are spending any donations and government can assist in the better governance of the charitable sector. These regulations may represent a small and technical step in the modernisation of charity law and regulation in Northern Ireland but they will allow the new regulator to get on with its job and will enable charities in Northern Ireland to be officially recognised and regulated as charities in the same way that charities in England, Wales and Scotland are currently. I therefore commend these regulations to the Committee.