Truro Charity Seminar

Francis Clark
Charity
Conference
21 May 2015

www.francisclark.co.uk
Chairman’s Introduction
Tom Roach
Partner, Francis Clark

Housekeeping

Programme
• SORP 2015
Darren Perry, Accounts and Audit Manager, Francis Clark
• General Tax Update/Charitable Trading /Property
Related Taxes
Paul Collings, Tax Partner, Francis Clark
• Mergers and Acquisitions
James Evans, Partner, Foot Anstey
• Trends in Charity Property
Anna Phillips, Senior Associate, Foot Anstey
Coffee break

Accounting update
Two SORPS please
Darren Perry

Introduction
• Accounting standards are changing
• FRS 102
• Leading to the new Charity SORP
• Or as the title suggests the new Charity SORPs
• That’s what we are focusing on today
• A ‘not too technical’ session
• But before we start – audit thresholds have changed

Audit thresholds
• Periods ending on or after 31 March 2015 – i.e. now
• Income between:
• £25,000 and £1 million – Independent Examination
• Over £1million - audit
• An audit is also required if total assets > £3.26 million and gross
income > £250,000 (unchanged)

Two SORPs

Background
• Dates – periods beginning on or after 1 January 2015
• No early adoption
• Depending on the size of the charity you may have a choice:
• FRS 102 SORP – all can
• FRSSE SORP – can if under small companies threshold
• Then within each SORP, the ‘larger’ charities will have a separate
list of additional requirements
• Confused?

Thresholds – small companies
• Small companies thresholds changing from 1 Jan 2016 - can be
applied voluntarily from 1 Jan 2015, provided new (FRS 102)
regime is applied
• Small companies - any 2 of 3
1. Income < £10.2m (was < £6.5m)
2. Gross assets < £5.1m (was < £3.26m)
3. Average employees <50 (was <50)
• Doesn’t help charities re choice of SORP in year 1

Thresholds – small charities
• Small charities (audit threshold) – one of
1. Income < £1m (was < £500k)
2. Gross assets < £3.26m (was < £3.26m)
3. By ‘larger’ charities, I mean those over these thresholds
• With increased audit thresholds, fewer will have to adopt the larger
charity disclosure – some good news

Choosing the right SORP
• Many here today will have income < £6.5m and so could adopt
FRSSE SORP
• But neither choice means staying where you are
• FRSSE will disappear in 2016 and be replaced with something else
(FRS 102 (small))
• Don’t know whether there will be a ‘SORP FRS 102 (small)’, but
doubt it
• So why change twice? Many will simply choose the FRS102 option
• Begs the obvious question what is the difference between the two
SORPs?

What’s in FRS102 SORP but not
FRSSE SORP?
• Cash flow statement
• Holiday pay accrual
• Key management personnel employee benefits – i.e. pay
• Aggregate value of unconditional donations made by trustees
• More details on transactions/guarantees with related parties
• Accounting for financial instruments, defined benefit pension
schemes and multi employer pension schemes is different
• Some additional accounting cost (cash flow for all), but do you want
to change twice. Talk to your auditors.

Changes from 2005 SORP

How is SORP 2015 different from
SORP 2005?
• Modular format – use those modules that apply to you
• Musts – mandatory - failure to follow is non-compliance with the
SORP
• Shoulds – best practice (failure to adopt is not ‘non-compliance’)
• Mays - optional and may be useful for trustees in certain
circumstances

Trustees’ Report

Trustees’ report headings
2015 SORP headings:
1. Objectives and activities
2. Achievements and performance
3. Financial review
4. Plans for future periods (larger only)
5. Structure, governance and
management
6. Reference and administrative details
2005 SORP headings:
1. Reference and Administrative Details
of the Charity, its Trustees and
Advisers
2. Structure, Governance and
Management
3. Objectives and Activities
4. Achievements and Performance
5. Financial Review
6. Plans for Future Periods

Trustees’ report headings
• Trustees’ report – the same but different
• Order makes mores sense
• Important things first
• Structures and admin at the back
• Opportunity to sharpen up reporting (Charity Clarity)
• I read a lot of reports and the first two pages are often a little dry!

Trustees’ report content changes?
• Reserves - all charities
The charity must explain any policy it has for holding reserves and
state the amounts of those reserves and why they are held. If the
trustees have decided that holding reserves is unnecessary, the report
must disclose this fact and provide the reasons behind this decision.
• This requirement clearer – more thought needed in many charities
• Reserves (larger) – more detail (inc re designated funds) with
explanation as to when funds are expected to be used
• Principal risks and uncertainties, plans and strategies to deal with
(larger)

Trustees’ report content changes (2)
• Explain financial effect of significant events (larger)
• Arrangements for setting remuneration of key management
personnel and any benchmarks, parameters or criteria used in
setting their pay (larger)
• Explanation of social investment policies, if applicable (larger)

Financial Statements

SOFA - headings
SORP 2005 SORP 2015
Income
Incoming resources from generated funds Donations and legacies
Voluntary income Charitable activities
Activities for generating funds Other trading activities
Investment income Investments
Incoming resources from charitable activities Other
Other incoming resources
Expenditure
Cost of generating funds Raising funds
Costs of generating voluntary income Charitable activities
Fundraising trading, costs of goods sold Other
Investment management costs
Charitable activities
Governance costs
Other resources expended Net gains/(losses) on investment assets

SOFA – other changes
• In addition to format changes, which are welcomed, the following
• Comparatives for all columns – practical issues to resolve
• Income recognition – ‘probable’ rather than ‘virtually certain’ –
SORP Module 5 covers and for some care will be needed
• Exceptional items now ‘material items’ and clarity on where to put
them in the SOFA
• Governance costs – no longer on the face but form part of support
costs and spread as appropriate across categories

Balance sheet
• Financial Instruments
• rare for complex instruments (e.g. derivatives linked to loans,
incl swaps, caps and collars
• But care re long term debtors and creditors and the time
value of money
• Holiday pay accrual
• Stocks of donated goods – fair value unless cannot be established
reliably – some common sense to apply here
• Cashflow statement (as mentioned above if using FRS102 SORP)
– Module 5 has the proforma headings

Disclosures in the notes
• Salary bandings – all charities now, small and large, numbers
earning > £60k in bands of £10k
• Trustees and staff remuneration
• Increased disclosure, more transparency, public interest
• Some scope for what is disclosed (see next slide) but
FRS102 SORP users must disclose remuneration of ‘key
management personnel’ – Module 9

Key management personnel - verbatim
All charities must disclose the total amount of any employee benefits
received by trustees and its key management personnel for their
services to the charity. The trustees of charities, particularly larger
charities (charities subject to charity audit), should give consideration
to the information needs of their funders and other stakeholders in
making their accounting disclosures. For example, it may be helpful to
provide details of the employee benefits received by the charity’s
Chief Executive Officer or highest paid staff member, or alternatively a
charity may choose to disclose the amount of employee benefits paid
to its key management personnel on an individual basis.

Conclusion

Two SORPS please - summing up
• Choice of two SORPs – consult to agree which one to chose
• In very, very simple terms for many charities, I think the additional
burden of FRS102 SORP will be:
• cash-flow statement
• key management personnel disclosures will need consideration
• And so they will go for FRS 102 to avoid changing again
• A chance to improve your trustees’ report
• Number of presentational changes and anyone with longer term
financial assets or liabilities will need to think through
• We promised a ‘not too technical’ recap and hopefully we
succeeded.

General Tax
Update
Paul Collings

General Tax Update
• Gift Aid
• Charity Commission guidance on charity tax reliefs
• Social enterprise investment reliefs

Gift Aid – Small Donations Scheme
• Introduced 6 April 2013
• Small cash donations – up to £20
• Current annual cap £5,000 = maximum reclaim £1,250
• Budget 2015 - new cap £8,000 = maximum reclaim £2,000
• Effective April 2016

0% Savings Band

0% Savings Band
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
2014/15 2015/16
0% savings income
band
Personal allowance

Gift Aid – Impact of 0% savings band
• Savings rate – now 0% on £5,000 (previously £2,880)
• On income above personal allowance (£10,600)
• May mean some individuals no longer pay tax
E.g. Linda – age 55
• Pension income of £9,800 and savings income £4,600
• In 2014/15 her tax liability = £592
• In 2015/16 she has no tax liability
• Impact on those ticking the gift aid box?

Savings Income – Budget 2015
• From April 2016
• Basic rate taxpayers – no tax on first £1,000 of interest
• Higher rate taxpayers – no tax on £500 of interest
• Banks will stop deducting tax at source

Gift Aid – impact on non-taxpayers
• What happens if a non-taxpayer ticks the gift aid box?
• Example:
- Gift aid donation of £800 made by non-taxpayer
- Charity reclaims £200 from HMRC
- Individual must meet £200 tax shortfall
• Self assess
• Impact of new ‘digital tax accounts’ – automatic upload of
information

Charity Commission Guidance
– charities and tax relief
• CC Guidance issued January 2015
• Trustees have fiduciary duty to act in their charity’s best interest
• Reasonable and prudent tax planning is OK
• Exploiting the tax legislation artificially is not OK
• Take professional advice

Social Investment Tax Relief
– which bodies qualifies?
• Investee body must be a ‘social enterprise’
• Charities (companies or trusts)
• Community interest company (CIC)
• Community benefit societies
• Must carry out a qualifying trade
• E.g. dealing in land excluded
• Amount of funding limited to E344,827

Social Investment Tax Relief - benefits
• Investments from 6 April 2014
• 30% Income Tax relief for investor
• Ability to roll-over another gain into the investment
• No Capital Gains Tax on eventual disposal

Advantages of SITR as funding
• Another way of obtaining funds
• Arguably more structured than awaiting death!
• Flexibility for provider can be attractive – they don’t necessarily
want to wait to gift on death
• A way of smoothing out bequest income?

Social Venture Capital Trust Scheme
• Announced in Budget 2015
• Will allow multiple investors to invest in charities (also in CICs and
community benefit societies) via a fund
• Widens the existing Social Investment Tax Relief
• No timetable in place yet

Charitable Trading
Paul Collings

Introduction
• ‘Trading’ - Corporation/Income Tax - ‘Business Activity’ - VAT.
• What is trading and what is permitted for a charity?
• Why is trading important?
• Primary purpose trading
• Ancillary purpose trading
• Non-primary purpose trading
• Fundraising concessions
• Use of trading subsidiaries

What is trading?

What is trading?
• Governed by case law:
• Number and frequency of transactions
• Nature of goods/services provided
• Intention of the charity in acquiring the goods to be sold
• Whether goods can be used and enjoyed by the charity selling
• Nature and mechanics of the sales
• Presence or absence of profit motive

What’s not trading?
• Sale or letting of goods donated for sale or let.
• Sale of investments
• Sale of assets which the charity uses for its charitable purposes
• Letting of land & buildings where no services are provided to the
user (e.g. simple room lettings)

When is trading permitted by a Charity?
• Primary purpose trading – includes trading in which the work is
mainly carried out by beneficiaries.
• Ancillary trading – trade which naturally goes hand in hand with the
primary purpose trading
• Non-primary purpose trading that does not involve significant risk
to the charity, which includes lotteries and trading within the small
scale exemption
• Those which contribute directly to the furtherance of the charitable
objects or (where the purpose is to raise funds) which do not
involve significant risk.

When is trading tax exempt?
• Primary purpose trading
• Ancillary trading
• Within small scale exemption
• A lottery (subject to compliance with certain lottery laws, must have
licence)
• Connected with certain fundraising events
Exemption is subject to the condition that the profits are applied solely
to the purposes of the charity.

Examples of primary purpose trading
• Provision of educational services by a charitable school or college
in return for course fees
• Sale of goods manufactured by disabled people who are
beneficiaries of a charity for the disabled
• Holding of an art exhibition by a charitable art gallery or museum in
return for admission fees
• Provision of residential accommodation by a residential care
charity in return for payment
• Sale of tickets for a theatrical production staged by a theatre
charity
• Sale of certain educational goods by a charitable art gallery or
museum.

Examples of ancillary purpose trading
• Sale of food & drink in a theatre bar to the audience
• Creche for teachers’ children
• But not simply because it is for fundraising purposes, it has to be
‘part of the charitable purpose package’.
• Need to understand charity’s objects and can change Mem and
Arts if appropriate

Small scale exemption
• If annual total incoming resources is
• < £20k – max permitted non-primary purpose trading before tax is
payable is £5k
• £20k to £200k – max is 25% of total incoming resources
• > £200k – max is £50k
• So if the value of what you are worried about is under these limits,
not much to worry about

Non primary purpose trading
• Trading to raise funds which does not further the charity’s objects
• Charity itself can only do this if no significant risk
• Risk that losses are made is a significant risk. Significance
depends on:
• Size of the charity
• Nature of the business
• Expected outgoings
• Turnover projections
• Sensitivity of business profitability to the ups and downs of the market

Mix of primary and non-primary
• You can have a mix of primary and non-primary – e.g.
• Art gallery shop with copies of paintings is primary, but
promotional tea towels are non-primary
• Letting students’ rooms to tourists in holidays
• Theatre meals to non theatre-goers
• Need to split out.
• Similarly you need split out the when you sell a mix of donated and
non-donated goods

Concessions for fundraising events
• Rules similar to VAT legislation. These events are known as
‘qualifying events’.
• Event must have a charitable purpose
• Event must be organised by a charity, or a trading subsidiary or another
qualifying body, for the charity’s own benefit
• Trading is not being undertaken through a series of events (multiple
events - such as, say, a regular weekly dinner dance)
• Accommodation for the event is not provided for more than 2 nights
duration
• There may be no more than 15 events of the same kind in a charity’s
financial year at any one location by a charity (including its trading
subsidiary).

Recap
• Charities are allowed to trade within certain parameters
• Some are always “exempt from tax”
• Certain categories which are not exempt, mostly non primary
purpose fundraising trades
• Profits from these are taxable if income from them goes over £50k
(or less for smaller charities)
• But there is an way to avoid this tax. Use a subsidiary.

Trading subsidiaries

A School
(A Charity)
Trading
Subsidiary
The “Classical” Charity Structure
100%
Subsidiary
Only certain profits
are exempt
i) Primary Purpose
Trading
i) <£50,000

A School
(A Charity)
Trading
Subsidiary
The “Classical” Charity Structure
Subsidiary
“Gifts”
profit to
parent
Company
No tax to pay!

Trading subsidiaries
• Gift Aid payment has to made within 9 months of year end
• Only Distributable Reserves can be Gifted
• Taxable Profits are sometimes different
• Charity Commission “withdrawn” their guidance on the subject

When might you use a subsidiary?
• Charity makes profits on trading that’s not linked to its primary
purpose
• Profit is close to small scale exemption limits
• Protect assets from “risk”
• Charity wants to have a separate organisation to carry out all its
trading activities, for commercial reasons

Trading subsidiaries - downsides
• Rates relief
• VAT concessions
• Stamp Duty Land Tax? (Note most recent finance bill)

Charitable trading - summing up
• Trading and charities can be a complex area but generally there
are usually ways to avoid tax
• As always – take advice!

Property related
taxes
Paul Collings

Property Income
• Charities are exempt from paying tax on:
• Rental income
• Sale of properties
• Where funds applied for charitable purposes
• NB: Exemption does not apply to trading in land or property
development

Business Rates Relief
• Budget 2015 proposed a wide-ranging review of Business Rates
Relief
• Business Rates Relief is worth £1.46bn to the charity sector
• Nothing is sacred – lobby hard

SDLT relief – Stamp Duty Land Tax
• SDLT normally charged on purchaser when buying property
• SDLT relief (100%) available to charities
• provided “greater part” of property is used for charitable purposes
• Finance Act 2014 – allows SDLT relief when a charity purchases a
property jointly with a non-charity
• Charity can claim SDLT relief on its share
• Non-charity must pay SDLT on its share

Fixtures in buildings - Capital allowances
• What are fixtures?
• New rules from April 2012 and April 2014
• Impact on property sales & purchases
• Buyer and seller must agree the value of fixtures
• If no election is made, future buyers may lose ability to claim
capital allowances
• Charities must consider this to protect property value
• Crucial to obtain information when buying/selling a property

Lifetime gifts to charities
• Exempt from IHT
• Do not need to survive 7 years to be effective
• No Capital Gains Tax on gift of asset to charity
• Income tax relief on gift of quoted shares and property to charities
• Deduct market value of gift from taxable income

Lower IHT rate for charitable giving
• IHT normally payable at 40% on death
• on assets in excess of nil rate band (£325k per individual)
• Access to 36% rate of IHT if ≥10% of ‘net estate’ left to charity
• If already substantial charitable giving, can increase value left to
beneficiaries

Lower IHT rate for charitable giving
Beneficiaries = £13,800 better off
Charity = £17,500 better off

Deeds of Variation and Wills
• Deed of variation
• Beneficiaries can alter the deceased’s will
• Within 2 years of death
• Effective for tax planning & other reasons
• 2015 Budget announced that the use deeds of variation will be
reviewed
• Recent case: Loring v Woodland Trust
• Importance of up-to-date wills with appropriate wording

CHARITY MERGERS
JAMES EVANS
FRANCIS CLARK CHARITY SEMINAR

PRELIMINARY ISSUES
• Many charity mergers now happening
• For many reasons- not all negative!
• Achieving better outcomes for beneficiaries
• Often building on existing successful collaborations
• Economies of scale/ Cost savings
• Financial difficulties/loss of fundamental income streams
• Regulatory environment too difficult

MERGER STRUCTURES
1 ‘TAKEOVER’
CHARITY
B
CHARITY
A
ASSETS
LIABILITIES

MERGER STRUCTURES
2 ‘TRUSTEESHIP’
CHARITY
B
CHARITY
A
TRUSTEE

MERGER STRUCTURES
3 ‘NEW CHARITY’
CHARITY
B
CHARITY
A
NEW
CHARITY
C
ASSETS
ASSETS
LIABILITIES
LIABILITIES

SOME KEY PRACTICAL LEGAL ISSUES
• Heads of Terms / MOU vital
• Shared objectives
• Structure
• Timetable
• Exclusivity
• Confidentiality
• Due diligence
• Legal
• Financial
• Commercial/Strategic/Organisational/Cultural

SOME KEY PRACTICAL LEGAL ISSUES
• Governance processes
• Be clear on the basis of transfer
• Express power to merge
• Dissolution clause
• Gift
• Members approval needed?
• Legal formalities of transfer
• Properties
• Staff/pensions
• Banking and security arrangements
• Third party consents

SOME KEY PRACTICAL ISSUES
• Merger Agreement
• Comfort to receiving charity
• Comfort to outgoing trustees
• Future use of funds and assets
• How does the transferring charity enforce?

KEY PRACTICAL LEGAL ISSUES
• What to do with ‘old’ charity?
• Register of Mergers not completely effective
• May need to keep ‘old charity’ going in dormant
form for legacies
• Law Commission consultation

FURTHER INFORMATION
• Charity Commission detailed guidance
• https://www.gov.uk/how-to-merge-charities
• Merger checklist
• https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/398566/Checklist_for_mergers.pdf
• Foot Anstey collaboration/merger seminars
• http://www.footanstey.com/events

THANK YOU
james.evans@footanstey.com
01392 685243

TRENDS IN CHARITY PROPERTY
ANNA PHILLIPS
FRANCIS CLARK CHARITY SEMINAR

CHARITY PROPERTY: SOME STATISTICS
• Property is the largest cost for charities after staffing;
• 40% of charities consider their building/s to be the greatest risk facing their
organisation;
YET…..
• Many charities cannot afford a designated property manager;
• 45% of charities rely on informal advice on property issues;
• 44% report experiencing unforeseen costs (such as maintenance/repair).

• Rationalisation;
• Maximisation and expansion;
• Diversification;
• Collaboration;
• Alignment.
KEY TRENDS

RATIONALISATION
• NSPCC
• Reduced cost basis by leveraging illiquid assets.
• Creating ‘Therapeutic centres’ ‘Worthy of beneficiaries’.
• Move to electronic data-base!!
• Buildings in Bristol, Taunton, Bath and Gloucester consolidated into one new Bristol service centre releasing £150,000 of
yearly running costs.
• 3 London offices consolidated into one flagship office, releasing £800,000 in ongoing rent, rates and maintenance service
costs.
• £3.9m by March 2015.
• VSO: relocation to Kingston Upon Thames – funded refurbishment
• RNLI: LEAN thinking

MAXIMISATION AND EXPANSION
• Charities with portfolios of property are analysing the best sources of income
• Responding to local markets – to maximise return
• Lincoln Cathedral
• Increase in charities actively seeking to expand portfolios
• 29% of charities intend to acquire (or dispose) of property in the foreseeable future;

DIVERSIFICATION
• Exeter Cathedral
• Foundations Project – wider heritage income stream
• New charities opening charity shops - Donkey Sanctuary
• Move to supported living

COLLABORATION
• Sharing expertise property ventures
• Sharing the properties themselves
• In times of austerity good management of property can make funds work harder
• 11% of Charities are looking to share accommodation with another organisation
• Charles Darwin House, WC1N, London hub for Biosciences
• British Ecological Society;
• The Biochemical Society
• Society of Biology
• Society of Experimental Biology
• Society for General Microbiology.

ALLIGNMENT
• Property should reflect your core values or at least not contradict them
• It should enhance your reputation as well as your purpose!
• The Environmental measures
• Green energy /EPC’s
• Living walls/Landscaping
• Image
• Location
• The National Lobster Hatchery
• The Sharpham Trust

PROPERTY IS NO LONGER JUST A FIXED ASSET!!
• Gone are the days when property could ‘do nothing’
• Property can be leveraged to huge effect!
• Property MUST:
• work for your charity;
• Entirely fulfil the needs of your beneficiaries;
• Be carefully reviewed against (and included in) your strategic plan;
• Be carefully cost managed;
• Be reflective of your goals and of your core values.

THANK YOU
Anna Phillips, senior associate
T: +44 (0)1392 685241 E: anna.phillips@footanstey.com
E:

Programme
• West Cornwall Youth Trust
Malcolm Woolcock, Administrator
• VAT Update
Julie Towers, VAT Partner, Francis Clark
• Pensions/Auto-enrolment and Investments
Update
Alan Turner, Chairman, Chartered Financial
Planner, Francis Clark Financial Planning
• Charity Communication with Impact/Social
Media and Fundraising
Mark Picken, Creative Director, MPAD
Lunch

21ST MAY 2015
FRANCIS CLARK CHARITY
SEMINAR, TRURO.
WWW.WESTCORNWALLYOUTHTRUST.ORG

WEST CORNWALL YOUTH
TRUST
CONTACT DETAILS
INFO@WESTCORNWALLYOUTHTRUST.ORG
07837 067585
Administrator, Malcolm Woolcock
PO BOX 321, MARAZION, CORNWALL. TR18 9BZ

THE HISTORY OF WCYT
THREE TRUSTEES, ONE PART TIME ADMINISTRATOR.
ALL BASED IN WEST CORNWALL
THE BACKGROUND TO THE
WEST CORNWALL YOUTH TRUST
WCYT FORMED 31ST DECEMBER 2009
THE ROY FLETCHER CHARITABLE TRUST
(SHROPSHIRE)

WEST CORNWALL
YOUTH TRUST
GEOGRAPHICAL AREA
WCYT SUPPORTS
ORGANIZATIONS IN AN
AREA WEST OF A LINE
ROUGHLY FROM ST.
AUSTELL TO NEWQUAY,
INCLUDING THE CLAY
DISTRICT AND THE
ISLES OF SCILLY.

WEST CORNWALL
YOUTH TRUST
WCYT DOES NOT
SUPPORT CORE
FUNDING or STATUTORY
FUNDING
WCYT ONLY PROVIDES
FUNDING TO
ORGANIZATIONS NOT
INDIVIDUALS
WCYT SUPPORTS YOUNG
PEOPLE BETWEEN THE
AGES OF 10 AND 21
YEARS OF AGE

WEST CORNWALL
YOUTH TRUST
THE MAIN CRITERIA
1. UNDERPRIVILEGED
2. SERIOUSLY
FINANCIALLY
CONSTRAINED
3. SOCIALLY
DISADVANTAGED
4. LEARNING DIFFICULTIES
and DISABILITIES

WEST CORNWALL
YOUTH TRUST
PROVIDED FIVE FULL YEARS
OF AWARDS TO THE END OF
JANUARY 2015
SUPPORTED OVER 200
CHARITABLE
ORGANIZATIONS TO DATE.
TOTAL GRANTS AND AWARDS
HAVE INCREASED ALMOST
EVERY YEAR
APPROXIMATELY £115k IN
THE LAST YEAR.
APPROXIMATELY £450k IN
TOTAL, SO FAR!
ACTIVE8 & AFTER8

HOW TO APPLY
THE FORM CAN BE DOWNLOADED FROM THE WEB SITE.
NOT COMPLICATED, NO TRICK QUESTIONS
BREVITY IS APPRECIATED
A DESCRIPTION OF THE COSTS INVOLVED
FEEDBACK – VERY IMPORTANT
PUBLICITY AND WEB SITE LINKS

DIFFERENTIATED SUPPORT
IT IS OUR NORMAL POLICY
TO MEET WITH NEW
APPLICANTS WHO APPLY
TO US TO DISCUSS THEIR
ACTIVITIES BEFORE WE
CONSIDER THEIR
APPLICATION FURTHER.
SOMETIMES THE
ASSISTANCE PROVIDED
MAY NOT BE FINANCIAL
BUT CAN BE CONTACTS,
INTRODUCTIONS AND
ADVICE.

VARIOUS GROUPS
SUPPORTED
CWRT
COPS
GOT
WILD
CLEAR
PENHALIGON’S
FRIENDS
CBA
PPO
LLFfY
TSYT

VARIOUS GROUPS
SUPPORTED
CPLZ
HRCST
SW RDA
ECM
CMC
HYP
BSES
BDC
CRCC CCF PCDT

VARIOUS GROUPS
SUPPORTED
KNEEHIGH
SCULPTURE
WORKSHOP
TRELYA
MERLIN MS
SOCIETY
PHOENIX
DREADNOUGHT
BF ADVENTURE
SHALLAL
SPECTRUM
REDYOUTH TRURO & PENWITH
COLLEGE
PROMAS

MATCHED FUNDING
COLLABORATION WITH
OTHER FUNDERS IS
WELCOME
SOME SELF HELP
/ SELF FINANCE
IS ENCOURAGED
– BAG PACKING,
ETC.

BURSARY FUNDING
AFTER AGREEMENT OF
THE CRITERIA AND
FEEDBACK ON USE
WE HAVE A SMALL
PLAQUE TO
PRESENT

The Big Dance Company
YOU MAY REMEMBER “FLAVA”
THEY WERE A PRODUCT OF THE BIG DANCE COMPANY

CFRS PHOENIX PROJECT
FALMOUTH SCHOOL
PHOENIX GROUP
OTHER SCHOOLS HAVE BEEN FUNDED
FOR PHOENIX PROGRAMMES and
“ACTIVE PLUS” and the HELSTON
PHOENIX PROJECT

PENCALENICK SCHOOL &
CFRS PHOENIX

Young Carers
Sculpture Workshop
HOSTED BY CRCC IN TRURO
PROVIDES THE YOUNG CARERS
WITH A SHORT BREAK

Nancealverne School
Ten Tors 2012, 2013, 2014 & 2015
17 km across Dartmoor
SUPPORT ALSO PROVIDED TO
CURNOW SPECIAL SCHOOL AND
DOUBLETREES SPECIAL SCHOOL
AS WELL AS THE NINEMAIDENS
SHORT STAY SCHOOL.

THE WAVE PROJECT
ACTIVITIES AT THE HEADLAND HOTEL,
NEWQUAY AND THE FLOWRIDER, PADSTOW.

PRINCE’S TRUST PARTNERSHIP
“GI2CFISHING” for young unemployed

SHALLAL THEATRE
COMPANY - MUSIC THERAPY

WEST CORNWALL YOUTH
TRUST
CONTACT DETAILS
INFO@WESTCORNWALLYOUTHTRUST.ORG
07837 067585
PO BOX, 321 MARAZION, CORNWALL TR18 9BZ
THANK YOU FOR YOUR KIND ATTENTION
ANY QUESTIONS

Agenda
• Hot topics and tips
• VAT points on mergers & acquisitions
• Charities and property

Recent changes
VAT refunds for certain charities
• Announced in the 2014 Autumn Statement
• New legislation effective from 1 April 2015
• Notice 1001: VAT refund scheme for certain charities issued by
HMRC 28 April 2015
• Refunds of VAT on expenditure relating to non-business activities
for
• Medical courier charities
• Palliative care charities
• Air ambulance charities
• Search and rescue charities

Recent changes
VAT refunds for certain charities
• Qualifying charities can recover VAT incurred on most goods and
services on or after 1 April 2015 relating to non-business activities
• No recovery for VAT relating to exempt activities
• VAT registered charities recover VAT relating to non-business
activities through VAT returns
• Non-VAT registered charities recover VAT relating to non-business
activities using form VAT 126
• Revisit method for splitting VAT on general overheads

Gift aid and donated goods
• Affects charities that claim gift aid on the sale of donated goods
• The charity or trading subsidiary receives a gift of cash from the
donor, the charity does not sell the goods
• Gift of cash is a non-business activity
• Possible impact on recovery of VAT for charity shops
• If the charity charges a commission for selling the goods this is
seen as a business activity and secures VAT recovery on VAT
relating to the shops
• VAT should be accounted for on the commission

Advertising
• Zero-rating for advertisements on third party’s medium
• Includes
• Design or production
• Adverts for staff
• Pay per click charges
• Goods for collecting monetary donations (concession)
• Excludes
• Costs relating to charity’s own website
• Advertising purchased by trading subsidiary
Certificate must be provided to supplier

Listed places of worship scheme
• Refund equivalent to VAT incurred on repairs to listed places of
worship
• From 1 October 2013 scheme extended to include works to pipe
organs, turret clocks, bells and bell ropes
• Claims can now be submitted by e-mail
• Visit the website for more information
• http://www.lpwscheme.org.uk/

VAT on mergers and acquisitions
• Transfer of assets between entities – consider VAT treatment
• In many instances Transfer of Going Concern (‘TOGC’) may apply
– no VAT charge
• Where land and/or buildings are transferred further considerations
and complications to consider
• There may still be VAT issues where assets are gifted (no
consideration)
• Take advice on VAT before the assets are transferred!

Formation of new charity
• New VAT registration
• Consider whether use of VAT group will be
beneficial/advantageous

Cost sharing exemption
• Exemption introduced July 2012
• No VAT on charges made by cost sharing entity to members in
respect of qualifying services
• Works for non-bought in services e.g. staff
• Must be a separate entity
• Beneficial for charities and businesses in exempt sectors

Charities and property
• Limited opportunities for zero-rating
• Construction of new ‘relevant charitable purpose’ buildings
• Construction of new dwellings or ‘relevant residential’ buildings
• Conversion of non-residential building into residential for housing
association
• Construction of ramps
• Widening existing passageways and doorways
• Bathrooms, WCs, shower rooms in certain circumstances
• Installation of lifts and hoists in certain circumstances

Charities and property
• Reduced rate of VAT 5%
• Work on dwellings or relevant residential buildings empty for more than
2 years
• Change of use conversions
• Installation of energy saving materials in residential buildings
• Don’t forget to consider VAT at the outset when planning property
expenditure

(c) copyright Francis Clark LLP, 2015
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Disclaimer & copyright

Pensions & Investments
Alan Turner, Chairman,
Chartered Financial
Planner
May 2015

www.fcfp.co.uk Twitter.com/francisclarkifa
Pensions & Investment
Agenda
• Auto-enrolment update
• Investment
• New Pension Rules & Giving

Auto-enrolment summary
• Auto-enrolment now affects all employers with
30-39 staff (from October 2015)
• Your staging date can be found at
thepensionsregulator.gov.uk
• The charges cap and proportionately increased
admin costs mean it can cost employers more
• And there is less resource to help

Summary
• We can help you navigate the ever changing
marketplace
• And establish what is right for your charity
• We can identify the best not-for-profit solutions
• …or any other solution
• But do your bit - plan Early!

Don’t leave it too late!
The industry is already
turning business away!
No. of
employers
Feb 2018Oct 2013

Investment Management
What about Investment?
• You have a duty of care to manage charity funds
‘properly’
• To a formal investment policy
• And (possibly) with a specific mandate in mind
• (Possible) personal responsibility for investment
decisions
• How do you know you will get it right?

Example question:
• What is risky?

Risk

Example:
• Traditionally fixed interest assets categorised as
‘low risk’
• But interest rates are low
• Real risk that when interest rates rise, fixed interest
assets will suffer a capital loss

A solution? an Absolute Return Bond Fund

what should you do? - Charities Commission advice
“make sure you know what you’re
doing when making investment
decisions – take advice from an
expert where necessary”
“If your trustee board doesn’t have the
skills and experience necessary, you need
to take advice from someone who does.”
Take Advice
Impartiality
“You must make sure
that any advice you
receive is impartial.”
“All investment carries risk and you need
to be clear about:
• how much risk you are prepared to
take
• how you will manage your investments
and monitor their performance”
Risk
Know what
you’re doing

Pension Rules & Giving
The last time we spoke…..
• Total Cash Freedom!
oNo compulsion to buy an annuity
oEntire pension pot available as a lump sum in
retirement from April 2015
oFirst 25% of pension pot still tax-free
oThereafter tax charge will be at marginal rates
Budget 2014 - Wholesale Pension Reform

New Pension Rules & Giving
• Death charge @55% removed (from April 2015)
• Pension assets can now pass to loved ones tax free
on death pre- age 75
• And are only taxed at recipient’s marginal rate if
death occurs post- age 75
There’s (yet) more changes

• More people will retain a pension fund
• Or the assets from the fund, post withdrawal
• Another asset to pass down on death?
Implications

Old World vs New
Old World
• Pension available to gift = Probably nil
• Gifts to charity from residue estate
New World
• Pension available to gift = anything not drawn. All of it?
• Residue estate possibly less – increased spending?
Shift Marketing emphasis
• From estates in isolation, towards pensions

• Ok, a change of literature
• But what should you be saying?
• And to whom?
Marketing

• How do you gain access to the pension fund?
• Speak to the will writer?
• Solicitor?
• What about ‘Nominated Beneficiary’ forms?
Don’t let the opportunity pass!
Practicalities

www.fcfp.co.uk
No responsibility can be accepted for any action taken as a result of information contained in this
presentation. We therefore strongly recommend that no action should be taken before obtaining
detailed professional advice.
Past performance is not a guide to future returns and the value of investments and income from
them may go down as well as up and an investor may not get back the amount invested.
Francis Clark Financial Planning is a trading style for Francis Clark Financial Planning Limited,
which is authorised and regulated by the Financial Conduct Authority.
Registered Office: Sigma House, Oak View Close, Edginswell Park, Torquay, TQ2 7FF.
Registered in England No. 05413603
Exeter Plymouth Salisbury Taunton Tavistock Torquay Truro
This PowerPoint presentation is for general information only and is not intended to constitute professional advice.
Though Francis Clark Financial Planning Ltd is confident on its accuracy, no duty of care is assumed to any direct Recipient of this presentation and no liability is accepted for any
omission or inaccuracy.
Important Statement
Twitter.com/francisclarkifa

Brand communications
with impact
Mark Picken MCIPR
Creative Director, MPAD
@mpad_markwww.mpad.co.uk

The South West’s VCSE
A Crowded Marketplace
Charity canvasser exercise

Charity brand index 2014
1. Cancer Research UK (3)
2. Royal British Legion (5)
3. Macmillan (1)
4. BBC Children in Need (11)
5. British Heart Foundation (7)
6. RSPCA (12)
7. Marie Curie Cancer Care (13)
8. Comic Relief (9)
9. Help for Heroes (4)
10. NSPCC (8)

What can we learn from the
Big 3?
Cancer Research UK
Royal British Legion
Macmillan

Cancer Research UK:
Be Bold and Brave

Cancer Research UK
“ During this financial year 12/13 we expect to spend £687,000
on refreshing our brand. This cost is less than 0.2% of our
annual income budgeted for this period. And over 5 years, we
expect this to equate to 0.03% of our projected income. This
gives us a lot of confidence that the benefits of undertaking this
change will easily outweigh the upfront investment.”

Poppy Appeal - Think visual

RBL’s Poppy Appeal is Britain’s
most trusted brand 2014
The British public trusts The Royal British Legion Poppy Appeal more
than any other brand, according to a new survey.
The Poppy Appeal tops the list of the UK’s 20 most trusted brands
compiled from a survey of over 3,000 people in the UK between the
ages of 18 and 74.

Macmillan:
Establish why you are
different from your
competitors.

The space Macmillan wanted to occupy
Rebrand in 2004

Life Force
Macmillan Brand Idea

Macmillan: The Results
Cost: £120,000
2004: From ranked as 28th most memorable
charity to 8th in Charity Awareness Monitor
No 1 in 2013
Income increased
20% increase in fundraising - from £97.7m
2005 to £118m.

Keep it authentic.
Charities are not
immune from
criticism

Embrace online but don’t
neglect traditional channels

Get ready, be Agile.
Are you ready for your Ice
Bucket Challenge?

But don’t be cookie cutter

How can you get the most out of
communications?
It should start with a strategy.

Focus on outcomes rather
than outputs.
Not just about coverage and social media noise.
It’s about organisational objectives e.g. volunteer
numbers, fundraising income or membership
numbers

Social Media and
Fundraising
Mark Picken MCIPR
Creative Director
MPAD

2014
– the year charity fundraising
went viral…

• 2.4 million ice bucket related videos posted
on Facebook
@mpad_mark
• 28 million people uploaded, connected
or Liked
• Justin Bieber’s video had
1,000,000 ‘Likes’
(Source: BBC)
• 3.7m videos on Instagram
www.mpad.co.uk

29 July – 28 August 2013
Amyotrophic Lateral
Sclerosis Association
(ALS) received $2.7m

29 July – 28 August 2014 Amyotrophic
Lateral Sclerosis
Association (ALS)
received $98.2m

Pre-IBC MND
Association received on
average £200,000 per
week

22-29 August 2014
MND Associate received
£2.7m

Macmillan received £3m, but
accused of hijacking the
craze.
(Had been criticised for being too slow on the uptake of
the #NoMakeUpSelfie).

What should we do in 2015?

1. Get yourselves organised!

GREGORY’S PLANNING MODEL 2000
www.mpad.co.uk

2. Think PESO

Paid, Earned, Shared, Owned www.mpad.co.uk
Credit: http://experts.allbusiness.com

3. Digital – it can be cheap, it
can be expensive.
Use your budget wisely and
effectively

4. Choose the right platforms:
Where are your audience
hanging out online?

Paid, Earned, Shared, Owned www.mpad.co.uk

5. Think like Harry Potter in
media terms

6. Video is the future
2015 stats say:
75% increase in video postings on Facebook
Facebook video is now bigger for YouTube
than brands

7. Crowdfunding
A quick fix?

Top tips
for an effective crowdfunding
campaign

1
Pick your
perfect platform.

2
Set a realistic budget

3
Keep your
campaign short

4
Prepare

5
Prepare

6
Aim to hit 30% within
the first 48 hours.

7
Video matters.

8
Keep it transparent

9
Say thank you.

10
Spread the load

11
Have a clear communication
and marketing strategy

12
Don’t give up!

Timeline
6pmMonday29Sept–Campaign goeslive
10.30pm Monday29Sept -£50,000 pledged
After 53hours£150,000 pledged

8. Pinterest

RNLI Pinterest board image –
Charlie used this in her blog
www.mpad.co.uk

Case study: Ice Skate Truro

Case
study:
Gromit
Unleash
ed
–Thankyou
RenegadeMedia&
SpiritPR

Case study:
Gromit Unleashed
–ThankyouRenegade&SpiritPR
80Gromits
£2.3millionraised forcharity
£123 mboosttoBristol economy
1.18m visitors tothetrail

Questions

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