Latest Plummer Parsons Charity Newsletter

1. newsletter…
CHARITYNews and Views from 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

2. The new ‘Civil Society’
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
eastbourne@plummer-parsons.co.uk
Hailsham
5 North Street,
Hailsham, BN27 1DQ
T 01323 846622
F 01323 440594
hailsham@plummer-parsons.co.uk
Brighton
4 Frederick Terrace, Frederick Place,
Brighton, BN1 1AX
T 01273 725123
F 01273 726123
brighton@plummer-parsons.co.uk
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:
charities@plummer-parsons.co.uk
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.