Charity Connect – April 2017

Cyber security – Threat or No Threat?

The increasing incidence of cybercrime seems to be continually in the news. To help our charity clients and trustees appropriately consider this risk as well as other issues, we have developed a series of checklists together with MHA, our national association of UK accountancy firms.

You can use the Cyber Security checklist to establish your current position, where you would like to be and how you are going to get there.

Additionally, we are also planning a charity seminar including a session on Cyber Security in May 2017. Further details on this will follow.

Apprentice levy

From April 2017, organisations with a pay bill of over £3m will pay an apprenticeship levy of 0.5% of their annual pay bill, less an annual allowance of £15k (for employers with more than one payroll, this allowance will only be available once).

The funds raised through this levy will be used to fund apprentice training costs such that:

  • Organisation too small to pay the levy will have 90% of their training costs paid for by the Government;
  • Additional support of £2k per trainee will be available to organisation taking on apprentices aged 16-18 or young care leavers;
  • Organisations with 50 or fewer employees will have 100% of their training costs paid for if they take on these apprentices.

Further information including FAQs can be found here on a website set up by Skills Development Scotland. If you have any concerns please do not hesitate to contact your Henderson Loggie tax contact.

Charities SORP: Where are we at now?

There have been no major changes to the Charities SORP (FRS 102) since it was published, however, some minor changes came into force from 1 January 2016 via Update Bulletin 1. A consultation on updating the SORP closed in December and an update is expected to be effective from periods beginning on or after 1 January 2019. Although we are still awaiting the details, there is not expected to be major change from this update.

The first SORP (FRS 102) Information Sheets are due to be published in the next few months by the Charity SORP making body. These will provide advice to users on interpreting the existing text of the SORP and although these are persuasive rather than mandatory, it may be helpful to look out for these when they are published.

Some changes may also arise from the Financial Reporting Council’s first triennial review of FRS 102.

Common Reporting Standard

From 1 January 2016, the Common Reporting Standard (the CRS) came into effect and this also applies to Charities. This global reporting standard is intended to make the automatic exchange of information (AEOI) simpler and the rules are being introduced in an attempt to prevent tax evasion.

HMRC has issued updated CRS guidance for the charity sector. Any charity which meets the following criteria will be required to report to HMRC by 31 May 2017:

  • whose investments generate at least 50% of the charity’s income
  • where any part of those investments are under the control of an investment manager

The rules are complex, the language used in the legislation and guidance is highly technical, and the practical application to charities is, in places, unclear.  To aid those charities affected guidance has been published on this by the Association of Charitable Foundations. Indications are that HMRC will not be too heavy-handed in implementing the new requirements but please do contact us if you have any queries or concerns in relation to this.

New Fundraising Regime in Scotland

Members of the new Fundraising Panel, which will oversee fundraising standards in Scotland and fundraising complaints about charities registered in Scotland, was confirmed in December 2016.

Fundraising regulation in Scotland changed from 7 July 2016 when the new regime came into effect.  A new fundraising hub has been set up with a dedicated phone line (0808 164 2520), website and email ( The hub is a source of information and advice.

In terms of the complaint process, the first place to go with any complaint continues to be the charity itself.  Where a charity is of a sufficient size, there should be a two tier complaints structure in place. So, if an individual feels that a complaint has not been handled well, it can be referred up to the trustees.

If the individual still remains dissatisfied, the complaint will be referred to an independent panel, made up of representatives from the public, donors, charities, and fundraisers, with OSCR and the Scottish government as observers.  The panel will be in place by autumn of this year.  Where the panel finds an issue that needs OSCR attention, it will be passed to them to be dealt with under their Inquiry Policy.