Not for profit enews - March 2011
Welcome to our monthly e-newsletter - designed to keep you informed of the latest news for charities, voluntary organisations, small businesses and individuals. We hope you will find it useful - suggestions are always welcomed. Please contact us if you have any questions. Remember, we're here to help.
Contents
- Voluntary Sector Finance
- Voluntary Sector Governance
- Other News
Voluntary Sector Finance
Proposed financial reporting standards for 'public benefit entities'
The Accounting Standards Board has published its proposals for a Financial Reporting Standard for Public Benefit Entities. This will accompany the Financial Reporting Standard for Medium-size Entities, and is designed to bring UK practice in line with international accounting standards. It is anticipated that this will come in to force for annual reporting periods beginning on or after 1st July 2013. Further details can be found on the FRC website.
Budget 2011
The 2011 Budget included a number of items relevant to the voluntary sector, particularly in relation to Gift Aid. A new scheme, to come into effect from April 2013, will allow charities to claim Gift Aid on donations amounting up to £5,000, without the need for Gift Aid declarations. Other changes include an increase in the benefit limit for ‘thank you’ gifts. At the same time, however, the Gift Aid protection provided for after the 2008 reduction in the basic rate of tax will come to an end in April, resulting in an estimated £100m loss for charities. The Government has also confirmed that it will introduce an online system for charities to claim Gift Aid and as a first step will shortly be publishing 'intelligent' forms (which contain automatic checks) for charities to use to apply for and claim tax reliefs.
The Budget also saw the rate of inheritance tax reduced from 40% to 36% for estates leaving at least 10% of their value to charity. By encouraging charitable legacies this will be a potentially significant benefit for those charities that benefit from legacy income.
Social enterprise does well in government's strategic partner programme
The government's Office for Civil Society has now announced which organisations will continue to receive funding under its Strategic Partner programme, for the period to 2014 (when the programme will end). The sector umbrella bodies to receive money include the Institute of Fundraising, chief executives body ACEVO and the National Council for Voluntary Organisations. Further information on this can be found here.
The number of funded organisations has been drastically reduced and there is concern about how representative the remaining organisations are, for example of smaller community organisations. In his article, Toby Blume points out that social enterprise appears to have done well here. Gotham Erskine client, the Social Enterprise Coalition, in collaboration with Co-operatives UK, was one of the successful applicants.
Voluntary Sector Governance
Voluntary sector less well prepared on tackling fraud
Research on how well the public, private and voluntary sectors are set up to prevent, respond to and clamp down on fraud has shown the latter to be lagging well behind the other two sectors. See the Civil Society article for further details on the research findings, or view our article section for some practical measures to reduce vulnerability to fraud.
Other News
Reporting on pay gap between genders
Employers, including those in the voluntary sector, with 150 or more employees are being encouraged by the government to report on the pay gap between genders, rather than having regulations implemented. The Equality and Human Rights Commission has produced guidance on this.
Simplifying charity law into one Act
It has been announced that current charity law will be consolidated in a single Act of Parliament with the publication of a Charities Bill. The Bill will bring together law from the Recreational Charities Act 1958, the Charities Act 1993 and the Charities Act 2006, and while updating the text and simplifying the structure of existing legislation, it will not result in policy changes. See the Cabinet Office website for further details.
Substantial donors rule to change to 'tainted donations' test
Draft rules have been issued by HM Revenue and Customs on 'tainted charity donations', intended to replace the current 'substantial donor' rules, which have received much criticism from the sector. In removing minimum thresholds, the rules will apply solely to donations which fulfil certain conditions. The new rules are likely to take effect from 1 April. For further information see the summary produced by Russell Cooke Solicitors.
Peter in print
Peter Gotham, Principal, writes this month in the Third Sector magazine on the valuable input that charities facing closure can have.
More official paperwork to go electronic only
The latest VAT Notes from HM Revenue and Customs reminds organisations with a VAT turnover of less than £100,000, registered for VAT before 1st April 2010, that they will be legally required to file VAT returns online and pay any VAT due electronically in 2012, probably from April.
Companies House, which deals with limited company paperwork, is expecting that all incorporations and filings of annual returns, accounts and the main company changes will be digital only electronic by March 2013. The consultation on this has still to be announced.
HM Revenue and Customs is also reminding business that all corporation tax payments must be made electronically from April, not necessarily online – see their guidance here.
Contact us
To discuss your charity accounting needs, please contact a member of our Not for Profit sector team, email charities@mhllp.co.uk or send us an enquiry online.
