Plummer Parsons Charity Newsletter 5 Sep 2010

Plummer Parsons Charity Newsletter 5 Sep 2010

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  newsletter… CHARITYNews and Viewsfrom Plummer ParsonsSept 2010 New Guidance from the Charity Commission In view of present financial and challenging difficulties together with developments within the sector, the Charity Commission has published four updated sets of financial guidance for charities and their advisers: Internal Financial Controls (CC8). Financial Difficulties and Insolvency (CC12). Charities and Reserves (CC19). Charities and Risk Management (CC26). According to Andrew Hind, Chief Executive of the Charity Commission, ‘regardless of a charity’s size, this revised guidance is something for all trustees to read’. Details of all four sets of guidance can be found on Plummer Parsons’ website www.plummer-parsons.co.uk/charity CIOs – 2011? Charitable Incorporated Organisations (CIOs) are the new corporate structures designed specifically for charities, offering limited liability and charitable status, reporting only to the Charity Commission. Hopefully, the necessary legislation will be dealt with by the new Parliament and CIOs will be available by early 2011. A) Personal allowances will increase by £1,000 from April 2011 and nearly 900,000 people will cease to be taxpayers. Some of these taxpayers could be making donations to you under Gift Aid and this tax advantage will then cease. Are you aware of this? Have you planned for this? B) The higher rate of income tax will increase from 40% to 50% and your higher rate taxpayer donors will obtain an increase in their personal tax refunds accordingly. Have you advised your donors of this? Have you suggested that they Gift Aid the additional tax repayment back to you? C) For some taxpayers capital gains tax will increase from 18% to 28%. Now there is an even greater advantage for your donors to donate to your charity shares, land and property rather than sell the same and suffer capital gains tax before making a donation to you. D) From 4 January 2011 VAT will increase from 17.5% to 20% and the Charity Tax Group calculates this will mean an additional £143 million costs to charities. There will be serious benefits in accelerating capital expenditure and incurring costs in December 2010 rather than in January 2011. E) For Listed Places of Worship there is a scheme in place entitling such bodies to claim grants equal to the VAT on building repairs but this will cease at 31 March 2011. This deadline is not expected to be extended so any major repairs should be sooner rather than later ie before March 2011. F) Inheritance tax continues at 40%. Any legacy to a charity will automatically save inheritance tax at 40%. Are your supporters aware of this? Remember – 3% transitional relief on Gift Aid donations is withdrawn after 5 April 2011. Budget 2010 What do the tax increases mean for charities? www.plummer-parsons.co.uk/charity
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  The new ‘CivilSociety’ With the new Coalition Government in place Conservative MP Nick Hurd, former Shadow Charities Minister, has been appointed the first Minister for Civil Society. Nick mentioned that the term ‘the third sector’ is now banned from use across Government because ‘the boss really doesn’t like it’. Encouragingly Nick advised that the first principle of the new Coalition Government ‘is to do no harm’. “Fit and Proper Managers” Under the Finance Act 2010 there is a new definition for tax purposes of charities and other organisations entitled to UK charity tax reliefs. Charities and CASCs must satisfy the ‘management condition’ whereby its managers must be fit and proper persons to be managers of the organisation. Where such a person is not deemed to be fit and proper the charity/CASC may lose their charitable status. The new test requires charities/CASCs to send information to HMRC about every trustee and senior staff appointment. Be careful – check the guidance – contact us for more information. Public Benefit – Knowing more According to the Charity Commission their research has shown that 76% of trustees know something about Public Benefit, 41% knowing a great deal or a fair amount. What is worrying, however, is that 24% of trustees know nothing about Public Benefit and they are failing in their duty to be kept abreast of this all important matter. Check our website to find out more about the assessments that the Charity Commission have already carried out and the general principles by which charities must now abide. Eastbourne 18 Hyde Gardens, Eastbourne, BN21 4PT T 01323 431200 F 01323 641767 [email protected] Hailsham 5 North Street, Hailsham, BN27 1DQ T 01323 846622 F 01323 440594 [email protected] Brighton 4 Frederick Terrace, Frederick Place, Brighton, BN1 1AX T 01273 725123 F 01273 726123 [email protected] News and Views from Plummer ParsonsSept 2010 CHARITY Cheques – on the way out? Many charities were taken by surprise when the Payments Council announced in December 2009 that it was intending to close the central cheque clearing which if it happened would sound the death knell for cheques. As you will appreciate many charities depend on cheques as a form of payment and receive many donations by cheque as well. Consultations are underway and a final decision will be made in 2016. In advance, however, consider now what alternatives you have for payments and bankings to ensure that you do not lose out. Please address all enquiries, responses and other issues raised by this newsletter to: [email protected] Email us the details of others who would like to receive this newsletter. In view of the shame of our politicians in claiming and declaring their expenses, charity trustees will want to ensure that any payments they receive are fully declared for all to see. Unless specifically provided for in the charity Trust Deed or other governing document, no trustee can be remunerated for services rendered. However, trustees can be reimbursed for expenses incurred during the performance of their duties and it is most important that such expenses are claimed wherever possible. Trustees can of course donate such expenses back to the charity under Gift Aid – we will gladly advise you further about the proper way to do this. Charity accounts must also properly disclose such expenses and in particular: the total amount of trustees’ expenses in the financial year the number of trustees who claimed or incurred expenses during the financial year (names do not have to be provided) if applicable, a statement to the effect that no expenses were claimed a brief description of the nature of the expenses reimbursed eg accommodation and subsistence, travel costs etc Expenses – the dreaded word! Trustees’ Week 25-31 October 2010 The Charity Commission are planning a week in October to increase awareness and understanding of the benefits of trusteeship and encouraging more individuals to take an interest in such responsibilities. Do you know the type of trustees you need or have difficulty finding suitable volunteers? Please let us know and we will gladly guide you through the various processes involved.