The Legislative Council has rejected a House of Keys proposal to exempt small charities from new regulations.

In a rare move, the upper chamber has defied the will of elected MHKs by throwing out an amendment approved in the House of Keys.

The amendment was made to the Charities Registration and Regulation Bill. Despite warnings against from Policy and Reform Minister Chris Thomas, MHKs last month voted to amend the Bill to exempt charities with an income below £5,000 from the need to be on the new-register.

But because the Bill was first introduced to parliamentary scrutiny in the Legislative Council, the amendments made by MHKs needed to go back to the upper chamber for acceptance.

And MLCs voted to remove the exemption from the Bill.

It is unusual for the unelected Legislative Council to go against the will of the House of Keys. One option now is for a conference between the two branches, when delegations of MLCs and MHKs would meet to try to thrash out a solution.

The Bill aims to modernise the register of Manx charities and increase the amount of information that will need to be submitted by organisations. But some were concerned the new requirements would be too onerous on small charities.

In the Legislative Council on Tuesday, Attorney General John Quinn repeated earlier warnings from Mr Thomas about possible unintended consequences from Mr Hooper’s amendment. He said it had caused concern in the charities sector.

Under the Bill as amended, the exemption did not leave an option for small charities to still register if they wanted, which could see some charities changing status from year to year.

Mr Quinn also pointed out that a number of charities with income below £5,000 actually held assets that were worth a lot more.

Some small charities might want to be on the register due to the ’reputational benefit’ it would bring, he said.

’These issues are all ones which I would suggest need to be explored properly and that both the charities sector and the general public be given the opportunity to provide input,’ he added.

’It is especially important that any potentially negative consequences be identified, both to the charities themselves and to the island’s reputation as a responsible regulator.’

MLCs voted in favour of his amendment to the House of Keys amendments, effectively removing the exemption. Only Tanya August-Hanson opposed.