3b finance - current hot topics

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FINANCE : Current Hot

Topics

12th November 2014

Presented by

Graham Wright

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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

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SORP 2015

• Introduction

• Implementation

• Which SORP ?

• Trustee Annual Report

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SORP 2015

KEY ISSUES

• Legacy Income

• Government Grants Received

• Accrued Leave

• Grant Making

• Pension Schemes

• Income Recognition

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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

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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!

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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

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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)

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INVESTMENTS

• Investment Policy & Guidelines

• Consider charitable objects &

Reserves Policy

• Social Investment / Programme

Related Investment

• Return / Risk / Volatility

(Total Return?)

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TRADING

SUBSIDIARIES

Question : Do you need one?

• Tax and administration

• Keep everything at “arms-length”

• Control and independence

• Accounting

• Permitted activities & commerciality

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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)

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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

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BANKING

ARRANGEMENTS

• Electronic and On-Line Banking:

Controls / Risks

Dual authority / Mandate

requirements

• Borrowings / personal guarantees

• Current Account charging

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BUSINESS

RATES

• Reliefs available to charities

- Mandatory (80%)

- Discretionary (20%)

• Charity Activity vs. Administration

• Trading Activity / Charity Shops

• Community Interest Companies,etc..