Mercer & Hole’s Business blog - Charities

David Cameron confirmed during a recent Prime Minister’s Question Time, that he will consult with the Treasury over the additional VAT cost which Charities will suffer when the VAT rate increase takes effect next January. He has suggested that Charities could be treated in the same way as local authorities and Central Government departments. Such bodies are repaid VAT. There has been much lobbying by Charities and related bodies on this issue recently. Whether this will be successful remains to be seen. ...

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On 8 July the Charity Commission released an update on its public benefit work. The work is in relation to charities demonstrating and reporting on the benefit they bring to the public, as set out in the Charities Act 2006. The Commission has published four assessments on arts charities and completed the work in connection with the assessments it carried out in July 2009. The purpose of the assessments is to provide real examples for rest of the charity sector, to help in their awareness of public benefit. Arts Charities With regard to the work on arts charities, four charities were chosen. The...

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On 8 June 2010, the Charity Commission published four updated sets of financial guidance for charities. They are: Charities and Risk Management (CC26) Financial Difficulties and Insolvency (CC12) Charities and Reserves (CC19) Internal Financial Controls (CC8) The guidance has been updated to reflect new developments and the rather challenging economic climate that charities are now facing. The updates include: New risk grid (CC26). Guidance on controls over Internet banking and safeguards against fraud and financial crime (CC8). Checklist of key questions for trustees to establish their charity’s financial position (CC12). Setting reserves in the context of financial and risk management ...

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There are several points coming out of the Budget, some are specific to charities and the not-for-profit (NFP) sector and some affect other sectors as well. In summary: The Budget includes a commitment to continue to work with the sector, including the Gift Aid Forum. The commitment is to improve the system and to encourage more charitable giving. HMRC intends to replace the current rules on substantial charity donors, consultation will be over the summer with full legislation published in the autumn. Alongside the Government’s consultation on the allocation of good causes funding from the National Lottery, the...

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The Charity Commission has been contacted by a number of individuals who have received bogus calls from other individuals who have stated that they are representing the Charity Commission. The individuals claim to be from the ‘debt collection department’ of the Commission and they demand payments for various services and adverts. The Commission does not charge for any of its services to charities, and it does not get involved in debt collection. If you should receive calls from these people, you should immediately report these sorts of incidents to the Police.  The Charity Commission...

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The Government has been forced to extend UK charitable status to equivalent organisations within the EU, Norway and Iceland. In line with a number of other administrative changes the law will also be changed to align the definition of charity for all tax relief exemptions. ...

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The Accounting Standards Board (ASB) has issued ‘FRS 30 heritage assets’ which requires some new disclosure requirements for reporting the value and content of historical, artistic, scientific, geophysical or environmental collections so this will be of particular relevance to the charities. The main features of FRS 30 are as follows: The disclosures will apply to all entities that hold heritage assets, regardless of whether these assets are reported in the balance sheet. These disclosures will provide information about an entity’s holding of heritage assets and the entity’s stewardship of these assets. The disclosures should make clear...

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Charities have ten months from the end of the financial year to send their Accounts and Annual Return to the Charity Commission. A record of filing is shown on the Charity Commission’s website. Since 2008 the Commission has used a ‘flagging’ system on its Register of Charities. Charities who have filed on time are flagged in green and charities with any outstanding documents are flagged in red. The Commission is launching a regional press campaign to encourage local trustees to ensure their documents are filed on time. The aim is to increase the number of charities filing...

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The Charities Aid Foundation (CAF) has published a report entitled, ‘How to Connect with Donors’. It has found that sophisticated donors want charities to demonstrate their effectiveness and to adopt new forms of communication. Over 200 CAF and non-CAF donors, in an online survey, were asked for their views on how the recession affects charities and what they thought charities could do to alleviate the effects of the recession. The survey revealed that: 77% of donors felt that charities should change the way they communicate with them, suggesting that social networking and emailing should be used. 85% think charities should be...

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The Government has given charities and donors a relatively short deadline in which to make their views known on how the Gift Aid regime might be changed. Ian Pearson, economic secretary to the Treasury, recently announced that the Government expects the proposals to be finalised by 30 September 2010. There is little doubt that the consensus is for the Gift Aid rules to be made simpler; regrettably, ‘simplification’ seems to have become a euphemism in recent years for rising tax.We can only hope that simpler means what it says in a dictionary this time. Charities provide too much valuable...

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