Presentation by Graham Wright, Finance Manager LCVS

1. FINANCE : Current Hot
©LCVS 1
Topics
12th November 2014
Presented by
Graham Wright

2. ©LCVS 2

3. ©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

4. ©LCVS 4
SORP 2015
• Introduction
• Implementation
• Which SORP ?
• Trustee Annual Report

5. ©LCVS 5
SORP 2015
KEY ISSUES
• Legacy Income
• Government Grants Received
• Accrued Leave
• Grant Making
• Pension Schemes
• Income Recognition

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 6

7. ©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!

8. HOLIDAY
PAY
30.8 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 8

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 9

10. ©LCVS 10
INVESTMENTS
• Investment Policy & Guidelines
• Consider charitable objects &
Reserves Policy
• Social Investment / Programme
Related Investment
• Return / Risk / Volatility
(Total Return?)

11. ©LCVS 11
TRADING
SUBSIDIARIES
Question : Do you need one?
• Tax and administration
• Keep everything at “arms-length”
• Control and independence
• Accounting
• Permitted activities & commerciality

12. VAT &
OTHER TAXES (1)
Generally,
• Need to be recognised by HMRC (meet
©LCVS 12
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)

13. ©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

14. BANKING
ARRANGEMENTS
• Electronic and On-Line Banking:
©LCVS 14
Controls / Risks
Dual authority / Mandate
requirements
• Borrowings / personal guarantees
• Current Account charging

15. ©LCVS 15
BUSINESS
RATES
• Reliefs available to charities
- Mandatory (80%)
- Discretionary (20%)
• Charity Activity vs. Administration
• Trading Activity / Charity Shops
• Community Interest Companies,etc..