Introduction
Is your charity safe?
The main topic of discussion in the sector over the last few months has undoubtedly been safeguarding.
We have titled our next seminars (Brighton 15 May, London 23 May) ‘Is Your Charity Safe?’ and we shall be looking at both the people and finances sides of keeping your charity safe.
Email Lucy Eldridge if you haven’t received an invitation to the seminars and would like more details.
The other issue everyone is talking about (not always with enthusiasm…) is GDPR. The 25 May is fast approaching and we include links to some guidance later (see Other Matters section) in this newsletter.
The key point is to get started soon if you haven’t and set in motion a process to ensure compliance as soon as you can.
On a personal note, it is with great sadness that we remember our dear and wise colleague John Hadjinicolaou who died late last year. Those of you who met him or spoke with him will know he was a true gentleman and a professional of the highest calibre.
John, we miss you greatly.
Charity Commission news
Safeguarding
- As mentioned above, this is the top issue in the sector. The Charity Commission has issued updated guidance and alerts that you can find at:
https://www.gov.uk/guidance/charities-how-to-protect-vulnerable-groups-including-children
- All charities should be reviewing their safeguarding arrangements. The matter should be discussed in detail at trustees’ meetings and the discussion and resultant decisions should be minuted – and actioned.
Review Your Finances
- Issue 59 of Charity Commission News (9 January 2018) recommended that “The New Year is an ideal time to review your charity’s finances.” They pointed to CC25 (Charity Finance Essentials) and CC8 (Internal Financial Controls) as two key guides to look at. We recommend that you do this too; and will be helping you do so in the May seminars.
Diversity
- The Charity Commission believes that many charities need to do more to promote diversity on their boards. This follows a review by Cass Business School and the Cranfield Trust. If you want to read the report:
- The Charity Commission has responded and also pointed charities towards their guidance on finding new trustees:
https://www.gov.uk/government/publications/finding-new-trustees-cc30
Fraud
- Updated guidance has been produced on how to protect your charity from fraud:
https://www.gov.uk/guidance/protect-your-charity-from-fraud
Annual Return
- There has been a useful update on this, which also sets out what you need to submit to the Charity Commission based on your legal structure and the level of your income:
https://www.gov.uk/guidance/prepare-a-charity-annual-return
CIOs
- Charitable companies can now convert to CIOs. In most cases, we doubt the cost and effort is worth it, but if you want to look further at the process:
https://www.gov.uk/guidance/change-your-charity-structure
LEIs
- Legal Entity Identifier. If your charity has equity or similar investments you will now have to obtain an LEI for your charity. Your investment managers will probably have already contacted you about this. Some will complete the process for you, but others leave the process of obtaining the LEI to you. We have assisted a number of charities in obtaining LEIs so let us know if you need any help. If you want to find more guidance on LEIs, go to:
https://www.fca.org.uk/markets/mifid-ii/legal-entity-identifier-lei-update
Authorising Your Accountants to Submit Accounts
- You can authorise your accountants (hopefully us) to submit your approved accounts electronically. Here’s how to do this:
https://www.gov.uk/guidance/authorise-a-charity-adviser-to-submit-accounts
Contacting the Charity Commission by Phone
- Not the easiest thing to do. We’ve included these details before, but just to remind you the CC contact centre is open 10-12 and 1-3, Monday to Friday, on 0300 066 9197.
Governance
New Governance Code
- Our last seminars in November looked at the New Governance Code. We believe that every charity should be working through the Code and adopting the ‘apply or explain’ approach to what the Code proposes. If you want to start looking at the Code itself:
https://www.charitygovernancecode.org/en
- A number of organisations have produced checklists that you may find helpful. Pick from:
http://www.unw.co.uk/wp-content/uploads/2017/10/Charity-Sector-Governance-Code-LCs.pdf
https://getlegal.bwbllp.com/for-charities
Template for assessing governance code-large charities ACEVO 2017
Managing difficult board dynamics
- A useful free publication from the Association of Chairs (especially if you are encountering such issues):
Trustee effectiveness
- A comprehensive study has been issued evaluating trustee effectiveness and awareness. See how your trustee board compares and what you can do to improve how you serve your charity – there are a range of publications to be found at:
Tax update
CHA1
- HMRC has withdrawn form CHA1 from its website and has replaced it with an online application process to ‘get recognition from HMRC for your charity’:
https://www.gov.uk/charity-recognition-hmrc
HMRC new guidance on grants and contracts
- Following a number of tribunal cases, HMRC has published new internal guidance on the vexed area of grants and contracts:
https://www.gov.uk/hmrc-internal-manuals/vat-supply-and-consideration/vatsc51600
Making Tax Digital (MTD)
- The latest news is that MTD will apply for VAT from April 2019 for charities and their subsidiaries. This means that all prime records must be kept in electronic format and the accounting software will be required to communicate with HMRC’s systems. This is unlikely to be an issue if you are using mainstream accounting programs, but you may wish to check with your software supplier what progress they are making with MTD.
Tax relief for grassroots sports
- Corporate donors can now make tax deductible donations to local sports clubs up to a maximum of £2,500 per accounting period. Previously tax relief was only available if the club was a registered charity or registered as a CASC with HMRC.
A-Z of VAT for charities
- Constable VAT Consultancy have produced a useful guide to VAT for charities:
https://www.ukvatadvice.com/a-z-vat-charities/
Charity tax review
- The Charity Tax Commission is seeking views on whether and how the tax treatment of charities needs to be reformed. The call for evidence closes on 6 July.
Other matters
GDPR
- From 25 May 2018, the General Data Protection Regulation (GDPR) will come into force. GDPR applies to ‘controllers’ and ‘processors’ of data. It will also:
– strengthen rules around personal data
– place a duty on organisations to be more accountable and transparent
– give individuals greater control over their personal data
- The Information Commissioners Office (ICO) has a dedicated helpline for small businesses and charities, to help prepare you for the new law. You can read more about the helpline and other resources available on the ICO website:
https://ico.org.uk/for-organisations/charity/
- Here is a useful guide from the Institute of Fundraising:
- And don’t forget the Fundraising Regulator also has guidance on GDPR:
https://www.fundraisingregulator.org.uk/information-registration-for-fundraisers/guidance/
- Hopefully you will find what you need from these sources to deal with everyone’s favourite subject!
Garfield Weston Foundation Anniversary Fund
- The Garfield Weston Foundation, one of the largest grant-making funds in the UK, is celebrating its 60th anniversary by launching the Weston Anniversary Fund.
- This one-off grants scheme will fund capital projects that provide new, or improve existing community facilities for people across the UK. Grants will range from £30,000 to £150,000 and applications close on 30 June 2018. For more details:
https://anniversary.garfieldweston.org/weston-anniversary-fund/
House of Lords report
- We mentioned this last time but if you want a succinct summary (rather than read all 156 pages), Sarah has again come up trumps:
Volunteers and the law
- This can be a difficult area. To help you with this, Bates Wells Braithwaite has made available some comprehensive guidance:
https://knowhownonprofit.org/tools-resources/volunteers-and-the-law
Audit and Independent Examination report wordings
- You will be seeing revised wording on audit and independent examination reports as both have been updated. Needless to say, the audit report has grown in length (again) and will definitely take up two pages now. We probably shouldn’t say this, but we’re not sure it makes things any clearer for people.
- And indeed, this reminds us that you need to be careful when you are completing your Charity Commission Annual Return. Do not tick that your accounts were qualified if you have received a normal unqualified report. Lots of charities have been ticking this by mistake.