Charities & Social Business

We help charities and social businesses by providing advice, support and reassurance that all the financial aspects are well-managed, allowing you to focus on your important work.

We work closely with charities and understand how each of these complex entities are very different and therefore have very different needs.

As charity specialists, we are able to give advice that is based on understanding the complexities of the requirements on charities, and tailor our advice to the needs of each organisation.

By keeping up to date with the ever-changing, ever-demanding requirements in the sector, we are able to keep our advice cost-effective by having solutions at our fingertips. Our online accounting system also keeps time and paperwork down to a minimum.

We have recently been lecturing, by invitation, on the SORP and have been involved in the joint Charity Commission and ICAEW project that examined trustees' approach to developing, implementing and reviewing their charity's strategy.

We also regularly blog on issues affecting the sector. We pride ourselves on our accessibility, and the level of attention and personal service our clients get.

Accounts and statutory compliance

A charity is required to prepare annual accounts in accordance with UK accounting standards, just like any other UK entity, as well as with the Charities Act and (perhaps) the Companies Act. But a charity’s accounts must also comply with the Statement of Recommended Practice (also known as the charity SORP). The SORP applies UK accounting practice for charities and sets out the accounting treatments that charities must follow.
As a result of this specific reporting framework, a charity’s accounts have a different format and different information to a standard commercial company.
The accounts include a detailed Annual Report by the Trustees, setting out the aims and objectives of the charity, how these have been met during the year and plans to achieve these in the future, and supported by a financial review. The Annual Report must include specific disclosures, and accompanies the detailed financial statements and notes.
At Goodman Jones, we have vast experience of preparing charity accounts in the required format and in accordance with the relevant legislation. Our specialist charities team is also fully versed in the requirements of the Charity SORP, pro-actively advising clients on the proposed changes to the  SORP.
In addition to preparing annual accounts, a charity must submit an Annual Return to the Charity Commission, and may have additional statutory reporting requirements for Companies House. We ensure that all necessary statutory documents and company secretary matters are completed in a timely manner and by the relevant submission deadlines.

Audit

Charities and social businesses face numerous and complex accounting and regulation requirements. These may include an independent examination under the Charities Act, or a full audit under the Companies Act or the Charities Act, carried out in accordance with International Standards on Auditing.
For audits, we take a systematic and risk-based approach. We maintain regular contact with our clients during the year: getting to know you, understanding how you operate, and finding out the issues that important to you. We bring these together in a pre-audit planning meeting with you, discussing those matters that are important to you, how we can help with these, and determining the audit information we require.
We believe a strong relationship between client and professional adviser is fundamental, and that you should have a dedicated team who you know and who know your organisation. Your partner is responsible for the audit, and your dedicated manager will co-ordinate the audit process, keep in contact during the work so you are aware of any matters identified.
We also have a policy of staff continuity, whereby the junior member of staff will become the senior during the following year’s audit. This ensures continuity of staff and ensures the detailed testing is performed by someone with knowledge and experience of your organisation.
Communication is key for an effective and efficient audit process, and therefore:
  • We maintain regular contact with you during the audit so all parties are aware of progress and any issues identified;
  • Any issues identified during our work will be discussed with you in a timely manner; and
  • We will ensure that you are kept fully informed of the impact of any issues upon audit work and the decisions taken.
A post audit meeting is a key part of our audit service and provides an opportunity for us to discuss matters face-to-face, and be pro-active in implementing any changes. We also provide a written report to management on completion of the audit setting out any issues identified together with our recommendations, as well as bringing to your attention any other matter which may impact your organisation.

Risk management

Charities can face many and varied risks – whether these be operational, financial, governance, external, compliance or strategic risks. Managing and mitigating these risks are responsibilities of the Trustees. We believe that risk management is far more than just a compliance requirement – it is a very useful management tool that can allow a charity to operate and achieve its aims more efficiently and effectively.
Our specialist team use their in-depth knowledge of your organisation and work closely with you to ensure that you have a risk management process in place that helps to identify potential risks and plans the best approach to countering these risks.
This involves:
  • Creating a risk policy
  • Identifying risks
  • Assessing these risks and their impact
  • Planning procedures to mitigate these risks
  • Establishing a risk review procedure
Alongside our risk management reviews, we undertake full reviews of your systems and processes. Our proposals and recommended approaches are designed with your organisation in mind – we know that every organisation is unique and faces specific risks. Therefore, we provide bespoke advice based on your needs.

Tax & VAT

"Charities don’t pay tax!"
If only things were that simple. In fact it could be argued that charities are more likely to be exposed to the impacts of tax and tax administration than commercial companies.
A charity may or may not suffer tax – but it must meet certain criteria in order to get these reliefs.
And actually a charity is likely to suffer tax - paying VAT on its purchases which it may not be able to recover.
Furthermore, not paying tax or completing tax returns does not mean that you do not need to be aware of conditions and criteria in relation to your charity’s tax position - not least meeting HMRC’s definition of a charity.
Having specialist technical support available is vital in ensuring your organisation remains fully compliant whilst being able to take advantage of the opportunities and reliefs available.
We get to know your organisation - how it operates, how it is structured, what are its income streams. All of this allows us to provide pro-active and clear advice. We can become your tax agent and communicate with HM Revenue & Customs (HMRC) directly in relation to your tax affairs.
At Goodman Jones, our dedicated tax department are very knowledgeable and highly experienced in advising charities on tax matters. We are supported by specialist consultants in PAYE and VAT.
VAT can be a minefield for charities - the varied nature of charitable income, carrying on a ‘business activity’ even if not considered to be trading, and the numerous VAT reliefs not available to commercial companies, all mean that keeping up-to-date with legislation and being able to cut-through the complex regulation is vital.
We can assist by undertaking a full VAT review and health check, advising on grants and contract income, assessing the impact on charity trading and group structure, providing pro-active advice on property transactions – and many, many more.

Organisation support

Solving your issues requires depth of knowledge and experience in your specific organisation.  We work in specialist teams to support you more efficiently and cost effectively.
Our partners and staff are accessible and approachable.  They provide you with the help and advice you need, when you need it. Your own Goodman Jones partner will act as a ‘centre point’ to co-ordinate activities and bring those difficult issues to quick, efficient solutions.
With our sister company, Fitzrovia HR, we can offer you a talented band of seasoned HR professionals to guide you through potential HR traps.  If you need support on matters outside the UK, we can provide accountancy, tax and business advisory support with GMN International.
Whatever your needs we are able to draw on a vast range of technical resources and expertise to support your organisation.

The Charities SORP

The Charities SORP FRS 102 must be adopted for accounting periods commencing on or after 1 January 2015. It details the required format and content of charity accounts, sets out the accounting treatments that charities should adopt, and provides guidance on many areas connected to the accounts.
What is the impact for charities?
The SORP provides improved guidance on existing technical areas, as well as guidance on new and topical areas.
In fact there are two SORPS:
  1. FRS 102 - one reflects FRS 102 and is applicable to those charities that prepare their accounts in accordance with the full UK accounting standards;
  2. FRSSE - the second SORP is available for those smaller charities that choose to adopt a reduced accounting disclosure framework (also known as the FRSSE, or Financial Reporting Standard for Smaller Entities). This is available for one year only (from 1 January 2015).
The SORPs
These take a “think small first” approach. The guidance is set out in a way that provides the rules that all charities must follow first, before stating the additional requirements for larger charities.
The SORPs also take a modular approach – fourteen core modules apply to all charities, and a further fifteen modules that provide guideline on specific matters.
The SORPs can also be customised so that those sections not applicable to you can be tailored out – this provides much more accessible guidance for smaller charities.
Who Do the Changes Affect?
All charities must prepare their accounts in accordance with the SORP relevant to their organisation.
But there are additional disclosures for those charities that prepare their accounts under FRS 102. These disclosures will include restating the comparative information using the new accounting requirements, and a reconciliation of the surplus or deficit incurred under the new rules compared to the old rules.
These additional disclosures do not affecting charities adopting the reduced accounting framework via the FRSSE.
When do the changes came into force?
The new standard must be adopted for accounting periods commencing on or after 1 January 2015.
For example, a charity preparing its accounts to 31 December will need to adopt the new standards for the year end 31 December 2015. This means that the comparative figures, for the year ended 31 December 2014, will need to be restated to reflect the new reporting requirements. And the opening balances for the 2014 accounts are taken from the Balance Sheet at 31 December 2013 - which will also need to be restated.
The Charities SORP – What do I need to know?
Download a guide to key changes for FRS 102 and areas that will need to be considered as a result of the new SORP FRS 102.

 

There are several things I value about working with Goodman Jones;.

  • The charity team are very flexible and able to adapt and complement the skills and expertise we have in-house. I value the fact that they are able to flag changes in the regulatory issues well in time for us to prepare. This was particularly valuable regarding the changes that the new SORP brought.
  • They are personable and easy to communicate with. I email questions and get timely responses with thought-through and helpful replies.
  • They use the opportunity of the audit to highlight issues that we could implement to make improvements. Those reports are presented in such a way that it makes it easy for me to share throughout the organisation.

In short, I am very happy with the service, which I would summarise as being helpful and thoughtful. I would recommend Goodman Jones to other charities looking for a competent and personable service.”

Paul de Freitas, Localgiving

 

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