Code of Conduct for MSPs - Volume 3, Section 2: Categories of Registrable Interests

Guidance

Flowcharts to aid the identification of registrable interests

Members may find it helpful to keep to hand the flow charts below. These are designed to remind members what they should bear in mind in deciding whether they have a ‘registrable interest’ in relation to the remuneration and related undertaking, gifts and overseas visits categories. These are not intended to be a comprehensive guide to the requirements of the Schedule to the Act in relation to these categories and should not be treated as replacing the Act, the guidance provided in Volume 2 Section 2 of the Code, or advice on a case by case basis from the Standards clerks.

Guidance from the Electoral Commission

This guidance has been provided by the Electoral Commission to explain what amounts to “political activities”, the concept of “sponsorship” under PPERA which will need to be indicated on the written statement where it arises, and the PPERA controls on permissibility of donations and controlled transactions (loans, credit facilities etc.) which will continue to be enforced by the Electoral Commission. 

Political activities:

Legislative references:

PPERA Schedule 7 Part 1(donations) Schedule 7A (loans)

The PPERA rules on donations and loans only cover those that are offered to, and used by you in connection with your political activities as an MSP. Your political activities as an MSP include both your political activities as a member of a registered political party and the activities that you carry out in connection with the office of MSP.

Common examples of what constitute political activities for an MSP include:

  • carrying out research on a particular policy that you are promoting in the Scottish Parliament

  • holding an event in your constituency or region to bring together different groups and individuals to discuss a particular issue or policy

  • visiting another country to understand how a particular policy works there

  • seeking election to an internal party office

The activities listed below do not constitute political activities:

  • activities you carry out specifically in connection with any Ministerial office held

  • parliamentary duties provided the costs arising in connection with those duties are recoverable or funded under the Members’ Expenses Scheme

This means that any financial support you receive in connection with the activities above is not considered a donation or loan under PPERA.

The examples provided above are not exhaustive. In all cases, you should make an honest and reasonable assessment based on the facts as to whether a donation or loan has been received in connection with your political activities.

If you are not sure whether what you are doing is ‘political activity’ please contact the Standards Clerks for advice.

Sponsorship

Legislative references:

PPERA Schedule 7 Part 1 Paragraph 3. Also refer to Section 161 (Interpretation: Donations)

PPERA contains a distinct concept of sponsorship. Sponsorship with a value of more than £500 must come from a permissible source, and sponsorship for political activities with a value of over £1,500 (singly or in aggregate) must be registered.  Members are required to indicate on the written statement form where a gift is sponsorship.

Sponsorship is support given to an MSP or any person for the benefit of the MSP to meet certain, expressly defined costs, including expenses in connection with:

  • any conference, meeting or other event organised by or on behalf of the MSP
  • the preparation, production, or distribution of a publication by or on behalf of the MSP, or
  • any study or research organised by or on behalf of the MSP

Where a payment does not amount to sponsorship, it may still be a donation.

Sponsorship is treated in the same way as a donation, meaning that payments over £500 can only be accepted from a permissible donor (see Managing donations to political parties).

Sponsorship must be reported if the amount you accept from one source exceeds £1,500.

Certain things are excluded as counting as sponsorship, but may still be registrable as gifts. These are: 

  • Admission charges for conferences or other events
  • The purchase price of publications, and
  • Commercial rate payments for adverts in publications only (payments relating to other types of advertising such as banners should be treated as sponsorship if they help to meet the costs of the event).

When calculating the value of sponsorship, the full amount of the payment received should be taken into account and reported if over the thresholds above. No deduction for any commercial value, or any benefit to the sponsor etc, should be made.

Permissibility

Legislative references:

PPERA Schedule 7 Paragraph 8 (donations), gives effect to sections 56-60 of PPERA for the purposes of the Schedule. Section 56, which covers the acceptance or return of donations refers to “permissible donors”, which for the purposes of that part of PPERA are set out in Section 54(2). Schedule 7A Paragraph 4(3) (loans) states that an authorised participant in a controlled transaction (loans, credit facilities, etc.)  is the same as a permissible donors in section 54(2). 

The Electoral Commission is responsible for regulating the rules in relation to permissibility of donations for political activities.  Any advice on permissibility should be sought from the Electoral Commission:

Mette Christensen:

Tel: 0131 225 0209

Email: mchristensen@electoralcommission.org.uk

Guidance:

Donations

When you receive any donation of more than £500 for political activities, you must immediately make sure that you know who the donor is and that the donation is from a permissible source.

When you receive a donation, you have 30 days to decide if you can retain it (and to register it in the Register of Members’ Interests where it is retained).

You should ask yourself:

  • ‘am I sure that I know who this donation is from?’
  • ‘is the donor permissible?’

If:

  • the donation is not from a permissible donor (see below), or
  • for any reason you cannot be sure of the true identity of the source

you must return it to the donor within the 30 day period beginning with the date on which you received the donation.

If you receive a donation from a source which you cannot identify (for example an anonymous cash donation of £750), you must return it to either:

  • the person who transferred the donation to you; or
  • the financial institution used to transfer the donation

If you cannot identify either the person who transferred the donation to you, or the financial institution used to transfer the donation, you must send the donation to the Electoral Commission.

Loans, credit facilities, etc

You must only accept loans, credit facilities, etc for political activities from permissible lenders. You must make sure that the lender is permissible before you enter into the loan as there is no equivalent 30 day period for checking the permissibility of loans. Entering into a loan that isn’t permissible is a criminal offence.

You should also carry out regular checks throughout the term of the loan to make sure that your lender is still permissible. This is because the lender must remain permissible for the whole period of the loan.

Donations given on behalf of others

If you are given a donation on behalf of someone else, the person giving you the donation (the agent) must tell you:

  • that the donation is on behalf of someone else
  • the actual donor’s details

An example of someone acting as an agent is where an event organiser is handing over the proceeds from a dinner held specifically to raise funds for your political activities.

If you have reason to believe that someone might be acting as an agent but has not told you, you should find out the facts so that you can make the right checks. If you are uncertain who the actual donor is you must not accept the donation.

When do you ‘receive’ a donation?

You usually ‘receive’ a donation on the day you take ownership of it.

For example:

  • if you are given a cheque, you receive the donation on the date that the cheque clears.
  • if a donation is transferred directly into your bank account you receive the donation on the date that you check your account or are notified of its receipt by the bank, whichever is earlier.
  • if you are given free goods or services – such as the provision of a computer free of charge, you receive the donation when you take ownership of the item

When do you ‘accept’ a donation or loan for the purposes of PPERA’s permissibility controls (separate from registration under the Interests Act) 

Type

Acceptance date

Donation

For the purposes of PPERA’s permissibility controls (rather than registration under the Interests Act), you are deemed to have accepted a donation 30 days from its initial receipt (if you haven’t returned it to the donor or forwarded it onto the Electoral Commission before then)  or on the date you complete your permissibility checks and decide to keep the donation as the donor is permissible, whichever is the earlier.

Loan

You ‘accept’ a loan on the date you enter into the loan or agreement. If the terms of the loan change at any time, you should record the date on which they changed

Overseas Visit

You ‘accept’ a donation towards the qualifying costs of an overseas visit on the date when the visit begins

 As a summary, you may only accept donations and loans from the following permissible sources:

  • Individuals on a UK electoral register (including overseas electors and bequests)
  • UK registered companies incorporated within the European Union (EU) and carrying on business in the UK
  • Great Britain registered political parties
  • UK registered trade unions
  • UK registered building societies
  • UK registered limited liability partnerships that carry on business in the UK
  • UK registered friendly societies
  • UK based unincorporated associations that carry on business or other activities in the UK

What doesn’t count as a donation for the purpose of PPERA’s permissibility controls?

Under PPERA, there are some specific types of payment and services to MSPs that are exempt from the rules on permissible donations. These are:

  • volunteer time spent support you as an MSP
  • any payment out of public funds for your personal security as an MSP
  • remuneration or allowances paid to you as an MSP, such as your salary or payments to meet your business costs or expenses from the Scottish Parliament member’s expenses scheme
  • any interest accruing from a donation. For example, any interest from a donation that is received and subsequently returned as impermissible is not considered a donation
  • facilities you are entitled to as a candidate at an election, such as a free postal facility
  • a donation towards your election expenses as a candidate at an election

Detailed guidance on how to check permissibility of donations and loans

Donations and loans from individuals

What makes an individual permissible?

Individuals must be on a UK electoral register at the time the donation is received. This includes overseas electors.

How do you check permissibility?

You can use the electoral register to check if an individual is permissible. You can arrange to view a copy of the electoral register with the local authority in which the donor appears on the electoral register.

You can find out which local authority you need to contact by entering the donor’s postcode on the aboutmyvote website.

You must check the register and monthly updates carefully to make sure that the person is on the register on the date you received the donation.

Donations and loans from companies

What makes a company permissible?

A company is permissible if it is:

  • registered as a company at Companies House
  • incorporated in a Member State of the EU, and
  • carrying on business in the UK

You must be sure that the company meets all three criteria.

How do I check company registration and EU incorporation?

You should check the register at Companies House, using the free Webcheck service at www.gov.uk/companies-house.

You should look at the full register entry for the company.

To check that the company is permissible, you need to look at its registered number.

Some companies will have a number only. Other companies have a letter as a prefix to the number.

The table below shows you if a company with a particular prefix is permissible, as long as it is also carrying on business in the UK.


Prefix letter

Is it permissible?

None

Yes

NI, SC

Yes

FC, NF, SF

Yes, if ‘country of origin’ on the register entry is an EU Member State

OC3, SO3

Yes, as a limited liability partnership –
see separate section below

IP, SP, NP

Maybe – see industrial and provident societies in the ‘Other types of donor’ section on page 32

RC

Maybe – you should check with Companies House

Any other prefix

No

How do you check if the company is carrying out business in the UK?

You must be satisfied that the company is carrying on business in the UK. The business can be non-profit-making.

Even if you have direct personal knowledge of the company, you should check the Companies House register to see if:

  • the company is in liquidation, dormant, or about to be struck off
  • the company’s accounts and annual return are overdue

A company may still be carrying on business if it is in liquidation, dormant or late in filing documents, but you should make extra checks to satisfy yourself that this is the case.

For any company, you should consider looking at:

  • the company’s website
  • relevant trade, telephone directories or reputable websites
  • the latest accounts filed at Companies House

If after carrying out your checks you are still uncertain that a company is permissible, please email or call us for advice.

Donations and loans from Limited Liability partnerships

What makes a limited liability partnership permissible?

A limited liability partnership (LLP) is permissible if it is:

  • registered as an LLP at Companies House
  • carrying on business in the UK
How do you check permissibility?

You should check the register at Companies House, using the free Webcheck service at www.gov.uk/companies-house.

You need to look at the LLP’s registered number. Only numbers beginning with OC3 or SO3 are permissible LLPs.

As with companies, you must be satisfied that the LLP is carrying on business in the UK. You can find more information in the previous section ‘How do you check if the company is carrying on business in the UK?’

Donations and loans from unincorporated associations

What makes an unincorporated association a permissible?

An unincorporated association is permissible if:

  • it has more than one member
  • the main office is in the UK
  • it is carrying on business or other activities in the UK

How do you check permissibility?

There is no register of unincorporated associations. Permissibility is a matter of fact in each case.

In general, an unincorporated association should have:

  • an identifiable membership, and
  • rules or a constitution, and
  • a separate existence from its members

For example, members’ clubs are sometimes unincorporated associations.

If you are not sure that an association meets the criteria, you should consider whether the donation or loan is actually from an individual (or individuals) within it (rather than the association) or if someone within the association is acting as an agent for others.

If you think this is the case, you must check the permissibility of all individuals who have contributed more than £500

You can find more information on carrying on business in the previous section ‘How do you check if the company is carrying on business in the UK?’

If you would like further advice on checking the permissibility of unincorporated associations in specific cases, please contact the Electoral Commission.

The table below shows you how to check permissibility for other types of donor:

Type of donor

Requirement

Where to check

Political party

The party must be registered on the Great Britain register of political parties

The Electoral Commission:

http://www.electoralcommission.org.uk

 

Trade union

Listed as a trade union by the Certification Officer

The Certification Officer

www.certoffice.org

Building society

A building society
within the meaning of
the Building Societies
Act 1986

The Financial Services Authority http://mutuals.fsa.gov.uk

Friendly/ industrial provident society

Registered under the Friendly Societies Act 1974 or the Industrial
and Provident

The Financial Services Authority http://mutuals.fsa.gov.uk