Thursday 28 February 2019

Charities - When to complete your annual return

Complete your charity’s annual return as soon as you approve its latest accounts and trustees’ annual report.

If your charity’s income is more than £10,000 you must complete an annual return within 10 months of the financial reporting year ending. All Charitable incorporated organisations (CIOs) must complete an annual return regardless of their income.

Trustees are responsible for making sure the charity’s annual return is completed on time. If this task is delegated to a member of staff, make sure they know what to do and when it is due.

Plan ahead to make sure your charity completes its annual return on time. You must also:

• update the charity’s details whenever something changes, such as a trustee being replaced
• keep your charity’s password safe, particularly if the person who has it leaves the charity
• arrange handover training if someone takes over responsibility for completing the annual return
• arrange a trustee meeting to agree the accounts and trustees’ annual report within two months of the financial period ending

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The Charity Digital Code of Practice

The Charity Digital Code of Practice aims to help charities increase impact, develop skills and improve sustainability. The Code aims to support charities of all sizes, budgets or causes in progressing with digital, offering a consistent framework for the sector to work towards. It is not a regulatory requirement, so it focuses on the principles and best practice in digital. To read more about the code, please visit the Charity Digital Code website.

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Public benefit reporting

A Charity review found that 48 per cent of charities do not adequately meet public benefit reporting requirements, though this was a slight improvement on the previous year.   Charities are required to include a public benefit statement in their accounts, setting out how their activities are linked to their public benefit.  The number of charities doing this adequately has been steadily increasing since the Commission began tracking it.  Two-thirds of accounts included a public benefit statement, but the Commission’s report said this is not enough as there should also be “evidence of some reflection on the difference that the charity’s activities had made.”

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Charities should get ready for Making Tax Digital for Value Added Tax (MTD VAT)

For VAT periods starting on or after 1 April 2019, most VAT registered entities with taxable turnover above the VAT threshold (£85,000) will need to keep their records digitally and send their VAT return data to HM Revenue and Customs (HMRC) using MTD-compatible software.  The exception is a small minority of VAT registered entities with more complex requirements. For these the MTD rules will apply from 1 October 2019.

The exception applies to charitable trusts, unincorporated not-for-profit organisations and VAT groups but charitable companies will still need to comply.

You can prepare by:
• looking at how you can keep your records digitally if you do not already
• if you currently use commercial accounting software ask your software provider when it will be MTD-compatible
• (for more complex charities) looking at your internal operations to make sure your end-to-end process is digital
• joining the MTD VAT pilot as soon as you can

Find out more about Making Tax Digital for VAT on the HMRC website. If you have any queries about this please contact HMRC.

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QuickBooks Online Subscription

Did you know you can subscribe to QuickBooks Online via WYCAS?  Our subscribers are entitled to free QuickBooks telephone support from Intuit, and expert telephone support from our Community Accountants.  QuickBooks desktop can be transferred to QuickBooks Online and any additional support, e.g. one to one visits, would be invoiced.  You can sign up here, or for more information please vist our website.

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Our services

WYCAS provides a range of specialist services designed to meet the needs of the third sector:

• One to one support and training
• Preparation of year-end accounts
• Independent examination
• Financial training courses and workshops
• Computerising accounts
• Bookkeeping and management accounts
• Advice and information
• Bespoke consultancy projects

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