3b finance - current hot topics
TRANSCRIPT
©LCVS 1
FINANCE : Current Hot
Topics
12th November 2014
Presented by
Graham Wright
©LCVS 2
©LCVS 3
Today’s Top
Ten
• SORP 2015
• Legal Structures
• Auto Enrolment
• Holiday Pay
• Gift Aid / Charity
Shops
• Investments
• Trading
Subsidiaries
• VAT & Other
Taxes
• Banking
Arrangements
• Business Rates
©LCVS 4
SORP 2015
• Introduction
• Implementation
• Which SORP ?
• Trustee Annual Report
©LCVS 5
SORP 2015
KEY ISSUES
• Legacy Income
• Government Grants Received
• Accrued Leave
• Grant Making
• Pension Schemes
• Income Recognition
©LCVS 6
LEGAL
STRUCTURES
Identifying the most appropriate legal structure for your organisation and its individual activities
• Charity vs. Community Interest Company
• Change to a Charitable Incorporated Organisation?
• Unincorporated vs. Incorporated
©LCVS 7
AUTO
ENROLMENT
• The Basic Rules / Concept
• Know your Staging Date
• Financial implications for your
organisation – include in the budget
• Compliance costs – time,
administration and penalties!
©LCVS 8
HOLIDAY
PAY30.8 million people work in the UK,
5 million do voluntary or compulsory overtime
• EAT legislation change - applies to people regularly working overtime / in receipt of bonuses / additional payments
• Additional payroll costs (est 3% - 5%)
• Spiralling payroll costs / a Time Bomb?
• EU Law – 4 weeks’ holiday entitlement
• Limit on retrospective claims
©LCVS 9
GIFT AID /
CHARITY SHOPS
• Donations eligible for gift aid
• Special Rules : sponsored challenges, membership fees, church collections, charity shops, events, auctions, volunteer expenses ‘given back’
• Gift Aid Small Donation Scheme (GASDS)
©LCVS 10
INVESTMENTS
• Investment Policy & Guidelines
• Consider charitable objects &
Reserves Policy
• Social Investment / Programme
Related Investment
• Return / Risk / Volatility
(Total Return?)
©LCVS 11
TRADING
SUBSIDIARIES
Question : Do you need one?
• Tax and administration
• Keep everything at “arms-length”
• Control and independence
• Accounting
• Permitted activities & commerciality
©LCVS 12
VAT &
OTHER TAXES (1)
Generally,
• Need to be recognised by HMRC (meet criteria, complete Form ChA1)
• Most types of income exempt as long as money is used for charitable purposes
• Can claim back tax that has been deducted e.g. on bank interest, donations, etc..
• Different reliefs available to Community Amateur Sports Clubs (CASC’s)
©LCVS 13
VAT &
OTHER TAXES (2)
• Reliefs available to Charities
(generally NOT available to CASCs)
• Registration Limit : compulsory if
non-exempt supplies (taxable
turnover) > £81K
• Grants vs. Contracts – BEWARE of
the VAT implications
©LCVS 14
BANKING
ARRANGEMENTS
• Electronic and On-Line Banking:
Controls / Risks
Dual authority / Mandate
requirements
• Borrowings / personal guarantees
• Current Account charging
©LCVS 15
BUSINESS
RATES
• Reliefs available to charities
- Mandatory (80%)
- Discretionary (20%)
• Charity Activity vs. Administration
• Trading Activity / Charity Shops
• Community Interest Companies,etc..