What will Brexit mean for Charities?

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What will Brexit mean for Charities?

“Brexit is Civil Society’s opportunity to think differently, assist government to make the transition and for major improvements to fix the cause of Brexit” Sir Stuart Etherington, Chief Executive, NCVO told an audience of charity delegates at a debate jointly hosted by Sayer Vincent and Russell-Cooke Solicitors at London’s Law Society on 6th February.

Sir Stuart was joined for the Question Time style debate by Clare Pelham, Chief Executive, Epilepsy Society, Caron Bradshaw, Chief Executive, Charity Finance Group and Daniel Bruce, Chief Executive, Internews.

The panel was introduced by Jonathan Orchard, Partner, Sayer Vincent and Chaired by Chris Rowse, Partner, Russell-Cooke.

How have charities been affected by Brexit?

The panel said charities have felt the impact of Brexit since the Referendum vote. Issues include funding losses, the falling value of the pound and labour market shortages, particularly in social care. Charities are also anxious about regulatory changes, the loss of research opportunities and the future challenges of attracting international researchers.

For international charities there are other issues. Daniel Bruce said that once Brexit occurs, international development charities will immediately lose their contracts for European funding, but they will still have contracts to honour to serve their beneficiaries. This issue hasn’t been solved by government and it will have a diabolical impact on those that rely on the charities’ support. He also said the solution isn’t for charities to register an office in an EU country like Dublin or The Netherlands. He said having a brass plate office arrangement won’t work.

How has the sector worked with government?

Sir Stuart said Brexit has crowded out the government’s ability to engage in other policies; the country is deeply divided and nothing has been done to fix the issues. He criticised the original guidance from the Charity Commission as being, ‘a dog’s breakfast’. He said a Brexiteer was part of the board and the guidance, which was later challenged, did nothing to help charities.

Caren Bradshaw added that Civil Society has been similarly preoccupied with Brexit and now it was time for charities to go back to their business models, their objects and missions and speak to their beneficiaries about how Brexit is impacting them and act. She added that some charities won’t survive Brexit.

Have charities spoken out enough about Brexit?

Clare Pelham was surprised by how little there was from charities in the media about Brexit since the initial Referendum vote. She said,

“I wish I had said more. I think the sector could have been a bit braver about speaking out. We seem to have moved from despair to complacency and complaining.”

But she added, the sector is risk averse.

Sir Stuart agreed. He said charities have been in a ‘bubble’ and have lost sight of what are beneficiaries have told them on a local level but now there is an opportunity to change that.

What is the role of the sector now to heal the issues?

Claire Pelham highlighted one big opportunity was the fact a leadership vacuum has emerged that the sector can fill. She said:

“The kaleidoscope has changed. On a positive note, Brexit has reminded charities of their duty, what is important and the needs of their beneficiaries and that is a good thing. Charities should be talking to their staff and beneficiaries about how they are impacted and do other practical things such as review their financial strategy and look for new opportunities.”

What are the new opportunities?

Sir Stuart said Brexit offered the sector a real opportunity for change. He said there was an opportunity now to “change how we deliver. The voiceless and disenfranchised have spoken for a reason and let us be their voice.”

The panel agreed that there was a real need now to put politics aside and speak up for beneficiaries. Speaking after the event, Jonathan Orchard of Sayer Vincent said:

“The evening was a great opportunity for staff and trustees from a wide range of charities to share views and experiences on how they are preparing for the potential implications of Brexit. As well as highlighting some of the challenges, it was refreshing to hear about some opportunities for refocussing on mission and new opportunities in fundraising.”

 

Click here for coverage of the event by Civil Society
Click here to coverage of the event by Third Sector

AccountingWEB Practice Talk with Fleur Holden

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AccountingWEB Practice Talk with Fleur Holden

Each week, AccountingWEB speaks with an accountant in practice about their daily routine and life outside the profession. Click here to read a recent interview with newly appointed SV partner Fleur Holden where she talks about charity accounting, flexible working and the email avalanche modern professionals have to cope with.

Fleur Holden is promoted to Partner to further build SV’s presence in the Midlands

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Fleur Holden is promoted to Partner to further build SV’s presence in the Midlands


 
Fleur Holden has been promoted to Partner as we look forward with ambitious growth plans in 2019.

Fleur is the firm’s sixth Partner and is based in the Midlands region. She has been instrumental in growing the Midlands business since September 2014 when she joined as a Director.

Fleur will focus on growing the portfolio of charity clients in the Midlands. She will also work closely with the other Partners overseeing the strategic direction of the business.

During her time at Sayer Vincent, Fleur has grown the client base and expanded her team in the Midlands. She works with a range of small and large charity clients, with the largest having an income of £70 million. Fleur also runs several of Sayer Vincent’s training seminars, including Trustee and Board training.

As a USAID specialist, Fleur will also be helping charities meet the new reporting requirements, following significant changes in the rules and regulations set by the US Government in 2017.

Commenting on her promotion Fleur says:
 

“I’m really excited to have been made Partner and I’m looking forward to the challenge of expanding our client base throughout the Midlands. Working at Sayer Vincent reflects my own values and ethos and partners and staff work together and support each other to ensure the best outcome for clients.

“We work collaboratively and flexibly with clients and offer a bespoke audit approach to fit their needs. Auditing is a people-orientated activity and we always work on that basis. I’m proud to be continuing my career with Sayer Vincent.”
 

Jonathan Orchard, Partner at Sayer Vincent says:
 

“We’re delighted to promote Fleur to Partner. Since joining the team four years ago she has shown commitment, drive and dedication and shares our goals of delivering excellent services and treating clients and staff well. Through her hard work we’re building a great reputation with social purpose organisations in the Midlands. We look forward to helping many more organisations achieve the best financial outcomes and in turn deliver more for their beneficiaries in 2019.”

 
Fleur is a qualified chartered accountant and Fellow of the Institute of Chartered Accountants in England and Wales, with a practising certificate and authorised to act as a statutory auditor.

Your November Sayer Vincent Newsletter

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Your November Sayer Vincent Newsletter

In our newsletter this month, we give you the latest charity finance news including updates on key aspects affecting charities in the recent budget announcement. We also provide the latest updates on VAT, tax and SORP. We have linked our latest articles including the series of blogs written for Charity Fraud Awareness Week, and we hear from another SV alumni.

Click here to view our newsletters and sign up to receive them direct to your inbox each month.

VAT and Tax updates

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VAT and Tax updates

Making Tax Digital for VAT
Organisations will be required to comply with Making Tax Digital (MTD) for VAT from 1 April 2019. However, HMRC has recently announced that the start date will be deferred by 6 months to 1 October 2019 for a number of different types of entity including:
– Trusts
– Not for profit organisations that are not set up as a company
– VAT groups
However, the MTD VAT soft landing period ends on 1 April 2020, and there will be no 6 month extension of this.
If you have any questions on what you’ll need to do to comply with MTD for VAT, please get in touch with us. As a first step, we recommend you get in touch with your accounting software provider to make sure they will be making the necessary updates to the software.
 
VAT on e-publications
Currently printed publications are zero-rated, but the same publications in electronic form are standard rated. However, the EU has just announced that it will permit member states to tax e-publications at the same rate as printed publications. It is not yet clear whether the UK will make this change. If it does, then one type of organisation it could impact on is membership organisations who provide a package of different supplies in exchange for a subscription fee.
 
Apprenticeship levy
Under the current apprenticeship levy rules, employers can transfer up to 10% of their unspent funds to another organisation. However, from April 2019 this limit will increase to 25%. Organisations with unspent funds should therefore consider whether there are any other organisations with a similar mission who could benefit from the funds. After 24 months, the government removes any unspent funds from an employer’s account.
 
Government Gateway
Services on the Government Gateway are gradually being moved to replacement services. All services will have moved by March 2019. Find out here how to get access to all HMRC online services.
 
Budget announcements
The 2018 budget took place on Monday 29 October. Key announcements for charities included:
– From April 2019 the small scale trading limit (which exempts non-primary purpose trading from corporation tax) will increase from £50,000 to £80,000 per annum (for charities with turnover above £200,000).
– From April 2019 the government will introduce a package of measures to reduce the administrative burden of the Retail Gift Aid Scheme for charities.
– From April 2019 the limit on the size of a single donation eligible for the Gift Aid Small Donations Scheme will increase from £20 to £30.
Further details on the budget can be found here.

2018 Budget summary for charities

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2018 Budget summary for charities

The Chancellor announced the government’s budget on 28 October 2018. It is great to hear that the Chancellor plans to help charities by increasing the annual limit for trading in a charity from £50,000 to £80,000 turnover (for charities with income over £200,000). This takes it very close to the VAT registration threshold of £85,000 so almost aligning these which is helpful.

In addition the decision to allow charities operating Retail Gift Aid to write to those whose donations raise under £20 a year, just once every three years rather than annually as at present, will save charities many thousands of pounds in administration and postage costs. Charity Tax Group was hoping the requirement to write would be removed altogether for these donors. However once every three years is much better than annually and HMRC does remain concerned that, with over 40% of adults not being tax payers, too often gift aid is claimed by non-taxpayers.

Click here to download our summary of the key changes affecting charities and social purpose organisations.

Charity Fraud Awareness Week – 22-26 October 2018

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Charity Fraud Awareness Week – 22-26 October 2018

Charity Fraud Awareness Week is a week-long annual event that promotes fraud awareness and helps charities become more resilient to fraud attempts.

This year, our Risk and Assurance team wrote a series of articles throughout the week covering various aspects of charity fraud and giving our insights on how you can prevent, spot and manage fraud if it should be an issue within your charity.

Click the links below to view our articles and get in touch with us if you have any queries.

Articles:

How can charities become more resilient against fraud?

Is your charity looking out for red flags and warning signs?

The 5 why’s approach

Fraud response plans

A different sort of fraud…

Charity Finance Audit Survey 2018

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Charity Finance Audit Survey 2018

The 2018 Charity Finance Audit Survey is now available for you to complete. This survey provides useful benchmarking information for the sector and we encourage you to complete it because the more responses submitted, the more useful the findings will be for you.

Click here for the survey. If you complete it, you’ll be entered into a prize draw for a luxury Christmas hamper and receive a copy of the results. Do forward the link if someone else should be completing the survey on behalf of your charity.

We’re recruiting trainee accountants!

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We’re recruiting trainee accountants!

We’d love to hear from individuals seeking to become Chartered Accountants who are committed to completing training for the internationally recognised ACA qualification and would love to work for charities and social purpose organisations. Click here for more information about the role and how to apply.