30/04/2025
Failure to prevent fraud offence for charities
From 1 September 2025, a new Failure to Prevent Fraud Offence will be enforced for large, incorporated charities that meet at least two of the following criteria: more than 250 employees, £36 million in income, or £18 million in total assets. The offence forms part of the Economic Crime and Corporate Transparency Act 2023.
This new offence means charities of this size must ensure they have appropriate systems and controls in place to prevent fraud within their operations. Failure to do so could result in significant legal consequences, including potential criminal charges.
Charities that are deemed large, should act now to assess their internal processes and ensure they are compliant with the forthcoming regulations. It is essential for trustees and senior managers to understand their responsibilities and take proactive steps to implement fraud prevention strategies. This includes developing comprehensive policies, providing staff training, and regularly reviewing financial controls. Failure to implement these measures could expose the charity to substantial legal risks.
The aim of this new offence is to strengthen governance and encourage organisations to take fraud prevention seriously. For charities affected, the time to act is now to ensure they are prepared for the new legal obligations that come into force in 2025.
For more guidance, read more: