Charity Newsletter – April 2019

Changes to Gift Aid

6 April 2019 marks the implementation date of changes to the gift aid rules which were announced in the 2018 Autumn budget and approved by Parliament in February 2019.

The maximum donation under the Gift Aid Small Donations Scheme which allows charities to claim gift aid on small cash or contactless donations without a declaration has been increased from £20 to £30. The maximum level of gift aid which can be claimed under the scheme in a year has also been increased to £2,000 from £1,250.

The donor benefit rules which allow charities to give a small reward to their donors in exchange for a donation and for the donation to still qualify for gift aid have been simplified reducing the thresholds from 3 bands to 2. The revised limits are as follows:

Value of donation Maximum value of benefits
£0-100 25% of the donation
£101+ 25% of £100 plus 5% of the value exceeding £100 up to an annual benefit of £2,500

Making Tax Digital for VAT

HMRC are reminding all entities over the VAT registration threshold that they require to sign up for Making Tax Digital after they have completed their last online VAT return and at least one week before the Making Tax Digital VAT return is due.

We reported in our last charity newsletter that trusts, unincorporated charities and those in a VAT group are able to defer their implementation of Making Tax Digital for VAT until October 2019. For all VAT registered entities where it is not possible to link their accounting system direct to HMRC systems the use of a spreadsheet to submit VAT returns to HMRC , called bridging software, is able to be used until April 2020. HMRC have now announced that the use of bridging software for trusts, unincorporated charities and those in a VAT group will be extended until October 2020.

Should you need any assistance with your implementation of Making Tax Digital for VAT, our VAT team are able to help.

Off Payroll Working

The Government has launched a consultation on extending the off payroll rules to the private sector from April 2020 for medium and large sized organisations ( i.e as defined under the Companies Act or with either £10.2m turnover or 50 employees in an unincorporated organisation).

This would mean that any individuals paid through personal service companies would be paid as if they were employees with the deduction of tax and NIC. Contractors would continue to be excluded from employee entitlements such as holidays and sick leave. The impact of this change will mean that individuals paid through personal service companies will become 13.8% more expensive as employer’s national insurance will be due. The consultation is available here.

Using Conflict as a Catalyst for Change

In conjunction with MHA, our national association of UK accountancy firms, we have written together a monthly guide for embracing, managing and mitigating conflict within your charity. Each article covers a different type of conflict that may effect your charity with the overall theme of using conflict as a catalyst for change. The full guide is available here.

Information Commissioners Office – Charity Risk Review Findings

In August 2018 the Information Commissioners Office published its findings of reviews it had performed at 8 large charities and 25 smaller charities during 2017/18. The report is intended to help all charities recognise where they can make improvements. The main areas found for improvement included; Information Governance, policies for data protection, training staff on data protection both at induction and annual refresher training, implementation of data protection compliance reviews and lack of procedures around incident reporting. The report is available here. Should you need any assistance with a GDPR post implementation review, this is something we can assist with.

National Cyber Security Centre Board Toolkit

The National Cyber Security Centre launched a toolkit in February 2019 which enables board members and management of organisations to identify, prioritise and manage the risks associated with cyber security. The guidance is written in plain English and enables readers no matter their IT knowledge to understand the practical changes which can be made to improve the cyber security in their organisation. The guide is available here.