How Will Brexit Impact The Charity Sector?

Friday 29 January 2021

Written by Suda Ratnam

How Will Brexit Impact The Charity Sector?

How Will Brexit Impact The Charity Sector?

Charities, not-for-profit organisations and clubs; have had to adjust to unprecedented disruption in 2020. There seems to be no end in sight for these disruptions in 2021. With the end of the Brexit transition period on 31st December 2020, the last-minute deal our Prime Minister did with the EU is likely to be the next big headache for the charity and not-for-profit sectors.  

Charities and not-for-profit organisations must adjust for post-COVID-19 restrictions as the new normal will make operations, fundraising, and business activities harder than ever. Some of these adjustments will help with how they deal with Brexit as well. 

Details of the deal still remain uncertain. The good news is for this sector is that the UK-EU Trade Cooperation Agreement specifies that the UK and EU member states need to set up a “Civil Society Forum” and the forum should meet at least once a year, can meet virtuallyI would like to think that this will include the not-for-profit sector. Interestingly the 1,400-page agreement mentioned the word “charities” only once. The agreement was rushed through so it mainly focused on goods, immigration, and settlement issues.           

The biggest impact of Brexit on the sector is the right to work and live. Under Brexit, UK citizens no longer have an automatic right to live or work in the EU and the same applies to EU nationals in the UK. An EU settlement scheme has been set up which EU nationals need to apply for, free of charge, by 30th June 2021 to continue living and working in the UK. UK Charites must ensure that their EU nationals have applied and have the right to live and work here.  

With lockdown restrictions, employees and employers have learned that people can work from home without too much disruption. Subject to local country employment rules, charities should explore employing individuals living in the EU. This can certainly be done for office-based volunteers.  

It is believed that there will be no change in the data regulations and the EU will not treat the UK as a “third country”. The implementation by the UK some three years ago of the General Data Protection Regulation (GDPR), the EU regulation looking at data protection and privacy issues, is expected to continue and follow future changes to stay in line with the EU.  

Charities importing and exporting goods will have to go through a huge amount of red tape! The border checks are likely to delay bringing goods in and out of UK.    

We haven’t seen much, in fact, anythingon how the UK-EU agreement will impact EU funding of UK charities. Organisations based in the UK may find that they are no longer eligible to apply for EU fundingIt is believed that UK charities receive about £250m from the EU and its institutional funding streams. There are a number of charities we work with that receive EU grants, which are only guaranteed for up to the end of 2021The grant funding which is based on eligibility criteria will certainly be affected as one would think that one of the criteria would be membership of EU.  

The Civil Society Forum will have to play a key role in influencing the UK and EU so that the impact of post-Brexit on charities is minimal. We can expect a shedload of further legislation coming from the government. We hope that the changes are introduced gradually.           

If you have any further questions, please don't hesitate to get in touch with us today.

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