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Charities: VAT relief and other support links

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Malcolm Lucas - Menzies Accountant

Malcolm Lucas – Charities & NFP Specialist
DD: +44 (0)20 7387 5868

Updated from 2nd June 2020

We’ve pulled together a selection of the leading updates from around the Charities and Not for profit (NFP) sector to help your organisation navigate through the Coronavirus crisis.

Further information is still to be released by the Government, but these items have been updated for the additional information released to date.  Some of the following is expressed views and assumptions in some areas as indicated, so please take care.

Reporting serious incidents to the Charity Commission during the coronavirus pandemic

The government has reminded trustees of their responsibility to report serious incidents to the Charity Commission.  Charities’ primary interest must be to look after the beneficiaries they serve.  It is important during the pandemic that trustees are aware of matters that may need to be reported as a serious incident. Timely reporting of serious incidents enables the Commission to provide support to trustees and management where necessary.

National Lottery Community Fund

Applications for the £300m charity sector government funding via the National Lottery Community Fund are now open.  Details of the kind of projects for which funding is available and how to apply can be found here:-

The aim is to support communities particularly affected by COVID-19, including for example older or disabled people, people from BAME communities, victims of domestic abuse, those suffering from financial hardship or suffering from mental health challenges.  If your charity supports such groups it may be eligible for grant funding.

Medical Supplies Relief

HMRC have updated their guidance on VAT and duty relief for imported medical goods at the end of April.  HMRC have now given general approval to the following charitable and philanthropic organisations

  • those registered by the Charities Commission or the Office of the Scottish Charities Regulator
  • state organisations which are devoted to welfare.

Read more about this VAT relief below.

How to manage competing priorities

The Charity Commission has also issued some guidance on how to manage difficulties in handling competing priorities during the Covid 19 outbreak to guide trustees and management in making the right choices, and also what to do if you need to cease operations.

We strongly recommend charities consider the Commission’s three step approach to creating a financial plan:

  • Step 1: Consider your current financial situation
  • Step 2: Options for minimising costs and protecting and increasing income
  • Step 3: Keep the charity’s operations and finances under regular review and take any additional actions

Following the above should help you to understand your charity’s financial position, creating a plan and making decisions.

Combatting Cybercrime and fraud

The Charity Commission has published new guidance warning charities of the rising trend in cyber crime targeting the Charity and Not for profit sector.

The guidance includes advice on:

  • Procurement fraud
  • mandate or Chief Executive Officer frauds
  • scam emails (‘phishing’)
  • unsolicited offers of goods, services or financial support (advanced fee fraud)
  • how to protect your devices and
  • how to report fraud and cybercrime.

The Chancellor has set out extra £750 million coronavirus funding for frontline charities

Chancellor Rishi Sunak has announced that charities across the UK will receive a £750 million package of support to ensure they can continue their vital work during the coronavirus outbreak.

See how the funding will be distributed

Charity Commission Guidance during COVID-19

The Charity Commission for England and Wales is considering how best it can help and support charities during the current Coronavirus crisis.  To this end it is releasing a series of posts giving advice how to cope during the pandemic.

The Commission understand that the outbreak will very likely impose substantial additional burdens on charities and their staff, volunteers and trustees.  The key announcement relates to government grants to cover most of the wages of a charity’s workforce who remain on the payroll but who are, temporarily, not working during the Coronavirus outbreak. 

In addition, there is advice for trustees on the use of a charity’s reserves.  Trustees should consider what their short, medium and longer term priorities are, and assess whether they need to amend their financial plans given the current situation.

Update from the Fundraising Regulator

The Fundraising Regulator has also issued guidance for charities on the impact of the virus on fundraising, including the impact on face to face fundraising, cancellation of events and the importance of maintaining fundraising and data protection standards while working from home:

Financial reporting implications of Coronavirus for charities

The Charities SORP committee has also issued some helpful guidance on the impact of the Outbreak on Charity Financial Reporting.  In particular it gives guidance on the impact on reporting in the Trustees’ Annual Report, considerations regarding asset and liability valuations, going concern assessments and post balance sheet event disclosures.

Useful resources

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Other announcements cover compliance issues including guidance on the holding of formal meetings (both AGMs and Board Meetings) and on making serious incident reports to the Charity Commission.

From a good governance point of view, it is important that any decisions made by trustees by telephone or video link are then properly documented and written down.

We are also encouraging clients to warn their staff who are working from home to be extra vigilant over scam emails and cybercrime following an increase in fraudulent emails purporting to provide Covid-19 advice or support.

Charities may also request a relaxation to the filing deadline for annual returns.

If you would like to discuss the impact of the Coronavirus on the content of your accounts and trustees’ report, your usual Menzies’ contact would be only too pleased to help.

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