1. Francis Clark Charity Conference 19 May 2015 2. www.francisclark.co.uk Chairmans Introduction Jonathan Deacon Finance Director, Buckfast Abbey 3. www.francisclark.co.uk Housekeeping 4. www.francisclark.co.uk Programme SORP 2015 Charles Evans, Partner, Francis Clark General Tax Update/Charitable Trading Paul Collings, Tax Partner, Francis Clark Mergers and Acquisitions James Evans, Partner, Foot Anstey Trends in Charity Property Anna Phillips, Senior Associate, Foot Anstey Coffee break 5. www.francisclark.co.uk Programme Property Related Taxes Paul Collings, Tax Partner, Francis Clark VAT Update Julie Towers, VAT Partner, Francis Clark Pensions/Auto-enrolment and Investments Update Kevin Stoyle, Chartered Financial Planner, Francis Clark Financial Planning Charity Communication with Impact/Social Media and Fundraising Mark Picken, Creative Director, MPAD Lunch 6. Accounting update Two SORPS please Charles Evans 7. www.francisclark.co.uk Introduction Accounting standards are changing FRS 102 Leading to the new Charity SORP Or as the title suggests the new Charity SORPs Thats what we are focusing on today A not too technical session But before we start audit thresholds have changed 8. www.francisclark.co.uk Audit thresholds Periods ending on or after 31 March 2015 i.e. now Income between: 25,000 and 1 million Independent Examination Over 1million - audit An audit is also required if total assets > 3.26 million and gross income > 250,000 (unchanged) 9. www.francisclark.co.uk Two SORPs 10. www.francisclark.co.uk Background Dates periods beginning on or after 1 January 2015 No early adoption Depending on the size of the charity you may have a choice: FRS 102 SORP all can FRSSE SORP can if under small companies threshold Then within each SORP, the larger charities will have a separate list of additional requirements Confused? 11. www.francisclark.co.uk Thresholds small companies Small companies thresholds changing from 1 Jan 2016 - can be applied voluntarily from 1 Jan 2015, provided new (FRS 102) regime is applied Small companies - any 2 of 3 1. Income < 10.2m (was < 6.5m) 2. Gross assets < 5.1m (was < 3.26m) 3. Average employees 200k max is 50k So if the value of what you are worried about is under these limits, not much to worry about 52. www.francisclark.co.uk Non primary purpose trading Trading to raise funds which does not further the charitys objects Charity itself can only do this if no significant risk Risk that losses are made is a significant risk. Significance depends on: Size of the charity Nature of the business Expected outgoings Turnover projections Sensitivity of business profitability to the ups and downs of the market 53. www.francisclark.co.uk Mix of primary and non-primary You can have a mix of primary and non-primary e.g. Art gallery shop with copies of paintings is primary, but promotional tea towels are non-primary Letting students rooms to tourists in holidays Theatre meals to non theatre-goers Need to split out. Similarly you need split out the when you sell a mix of donated and non-donated goods 54. www.francisclark.co.uk Concessions for fundraising events Rules similar to VAT legislation. These events are known as qualifying events. Event must have a charitable purpose Event must be organised by a charity, or a trading subsidiary or another qualifying body, for the charitys own benefit Trading is not being undertaken through a series of events (multiple events - such as, say, a regular weekly dinner dance) Accommodation for the event is not provided for more than 2 nights duration There may be no more than 15 events of the same kind in a charitys financial year at any one location by a charity (including its trading subsidiary). 55. www.francisclark.co.uk Recap Charities are allowed to trade within certain parameters Some are always exempt from tax Certain categories which are not exempt, mostly non primary purpose fundraising trades Profits from these are taxable if income from them goes over 50k (or less for smaller charities) But there is an way to avoid this tax. Use a subsidiary. 56. www.francisclark.co.uk Trading subsidiaries 57. www.francisclark.co.uk A School (A Charity) Trading Subsidiary The Classical Charity Structure 100% Subsidiary Only certain profits are exempt i) Primary Purpose Trading i)