Financial Health Check

Many of our existing clients are surprised to hear that we don’t just offer accountancy services, we are also able to offer financial health checks. Are you currently unsure if you are doing things properly, and that your finance systems are operating effectively? Well a financial health check could be just what you need. We provide a thorough review of your financial systems, then offer recommendations for improvements and crucially – support to implement those improvements. For a quote please email us.

Charity Compliance News

Charity Commission compliance casework:

The Charity Commission has issued findings from its recent compliance work. The most common issues were:

Poor financial management and reporting. This is still a significant problems in the charities that were investigated and includes issues such as poor financial controls, poor accounting records, as well as a failure to file accounts.

In many cases this resulted in fraud, theft or losses to the charity. Many charities overlook the need to have appropriate financial controls and systems in place, and forget the importance – which can have serious consequences and even result in the charity having to close.

The second issue was around trustee and governance problems. Key problems including failing to check conflicts of interest, poor internal controls and poor risk management systems. All of these issues can lead to poor performance of the charity and decisions being taken that are not in the best interests of the charity.

The full report and findings can be found by clicking here.

Adios to cheques

Adios – or goodbye for those of you who are not football fans – is likely to be the case for cheques by 2016. At present many charities use cheques on a regular basis for payments and also to receive donations. The Charity Commission has issued guidance to help charities update their financial controls for other payment methods. More information can be found in Internal Financial Controls for Charities (CC8) on the Charity Commission’s website.

New guidance for charities in tough times

The Charity Commission has updated its guidance to help charities through the recession and budget cuts.
The guidance that has been updated is:
• Charities and Risk Management (CC26)
• Financial Difficulties and Insolvency (CC12)
• Charities and reserves (CC19)
• Internal Financial Controls (CC8)

All of the updates focus around managing financial problems, reviewing and managing risks, safeguarding the assets of the charity, and setting reserves during times of financial difficulty.

CIC Central coming soon

Are you a Community Interest Company based in the central or east of England? In partnership with the national CIC Association we are pleased to confirm that we are developing a local presence for the CIC Association. CIC Central has two primary purposes – one is to raise awareness of what CICs are outside of the sector and the second is to provide support to CICs from other CICs, where people can discuss all things CIC related, debate topical issues and seek support and guidance from other CICs. If you are a CIC and would like further information on the first meeting please contact us. We are planning to hold a range of events across the central and eastern areas.

The cost of getting it wrong

Recently we were contacted by a charity that had a contract to deliver advice services. They had approached us for guidance on the VAT position of this income, and we were able to support them in reviewing the contract and deciding whether they should be charging VAT on these services. Luckily, the organisation spoke to us before they started delivery. If not the cost could have meant 17.5% of their contract value needing to be used to pay a VAT liability, plus penalties and surcharges for late VAT registration – which would not have been available as the income would have already been spent. The result – the charity is forced in to liquidation. Do you need help to consider the VAT position of your contracts? For more information please contact us.

Efiling for charities

The Charity Commission is trying to encourage all charities to e-file their annual accounts. The process is straightforward and e-filed accounts do not require the signatures of the trustees or accountants/auditors. The charity must keep a signed copy at their registered office.

The charity can apply for a password online and is then able to not only file their accounts, but also update the charity and trustee information.

PAYE penalties

HMRC have been issuing the first batch of penalty notice letters to organisations for missed PAYE and NIC payments. The actual penalties will be calculated and issued after the end of the current tax year.

To avoid these penalties organisations need to make sure they pay their PAYE and NIC on time, or only miss one payment. If you miss one payment it must be less than six months late – otherwise you still get a penalty.

In a time of reduced income levels for most organisations, care needs to be taken that money isn’t wasted on unforeseen penalties. The penalty is based on a percentage of the PAYE and NIC due, and starts at 1% and increases each time another payment is late.

Charitable Incorporated Organisations (CIOs)

For a briefing on Charitable Incorporated Organisations (CIOs) and how these may be of use to existing charities or social enterprises click here. The briefing answers some of the questions we have been asked about CIOs by organisations.

Looking for free help during the recession?

Third sector organisations can access a whole range of free help and support. The following is a selection of support that is available to you:
Free legal advice
Free property advice
Free design advice
Free IT support
To find out more click here to view a list of useful websites and organisations offering free help.