Charity Newsletter – November 2020

Changes to digital advertising VAT rates for charities

HMRC have agreed to change their policy on VAT rates applicable to digital advertising following a successful campaign by the Charity Tax Group. Certain types of digital advertising are now considered zero-rated, therefore charities should review VAT rates applied to advertising over recent years. Significant savings for organisations are possible for previous standard rate digital advertising such as:

• Retargeting individuals revisiting a website

• Demographic targeting

• Lookalike targeting

It is important to note that not all types of digital advertising have been changed to zero-rated.

SORP engagement discussions announced

The SORP-making committee has introduced a new development process to apply greater engagement using engagement partners who have been recruited via an open recruitment process.

Convenors have been allocated to each of the different engagement strands (specific areas) based on their interests. The areas will cover the key users of charity annual reports and accounts, as well as the SORP itself.

Details of each of the convenors, and the strands they have been appointed to, are provided on the dedicated SORP website.

Submission of accounts to OSCR

OSCR has announced that where charities are not able to file their accounts within the 9 month deadline of their year end that they will extend their grace period from 6 months to 9 months after the deadline.  This means that if charities submit late accounts during this time, they will not be penalised by being marked as late on the OSCR register. This is only applicable to charities where the due date for filing is between 1 March 2020 and 31 December 2020.

Companies House has already extended the deadline for filing company accounts from 9 months to 12 months where the filing deadline falls between 26 March 2020 and 29 September 2020

Making Tax Digital – Extended

The Treasury has recently announced their ten-year plan to build a trusted, modern tax administration system. This report includes introducing a progressive extension of HMRC’s Making Tax Digital work, exploring appropriate timing and frequency for payment of different taxes, and the technology infrastructure needed to support that, as well as a reform of the tax administration framework. HMRC plan to extend the Making Tax Digital programme, which has already been introduced, to more taxpayers and agents as part of the 10-year strategy. Extensions highlighted in the report include:

• Making Tax Digital will apply to all VAT-registered business for their VAT obligations from April 2022,

• Businesses and landlords with business income over £10,000 per annum will need to keep digital records and use software to update HMRC quarterly through Making Tax Digital from April 2023,

• Later this year, the government will be consulting on the design of what that system should be for Corporation Tax.

Independent schools salary sacrifice changes

The Optional Remuneration Arrangement (OpRA) rules end salary sacrifice arrangements for school fees for independent schools on 5 April 2021. There is the opportunity for schools where employees entered into a salary sacrifice scheme before 6 April 2017 for the payment of fees for the same child to restructure their arrangement so that the salary sacrifice is condensed for the whole school year with deductions being made between September 2020 and March 2021. This will benefit from continued lower income tax and National Insurance Contributions (NICs). Salary sacrifice arrangements are where school members of staff take a reduced salary in exchange for discounted school fees for their child.

ICAS guidance on going concern

ICAS has issued guidance on going concern for charity trustees covering reporting and accounting, financial management and external scrutiny considerations. The guide assists charity trustees to:

  • Assess their charity’s ability to continue as a going concern and to prepare a trustees’ annual report and accounts which properly address the relevant requirements.
  • Understand the work of their charity’s auditor or independent examiner ongoing concern.

The guide is available here

Charity insolvency

The Corporate Insolvency and Governance Act was passed into law on 25th June 2020. The Act aims to address financial problems that both voluntary organisations and private companies are having to face as a result of the COVID-19 pandemic. The new rules introduced to help charities facing problems are:

• The right to apply for more time to avoid debt enforcement action

• Limits to the rights of contractors to terminate supply agreements with charities

• Placing restrictions on winding up petitions where a charity cannot pay its bill as a result of the pandemic

• Introducing new procedures to help viable charities restructure if they are struggling with debt

 • Suspending some provisions in order to reduce the risk that trustees are personally liable during the crisis.

MHA Trustee Hub launched

Our national hub of downloadable templates and resources for charity trustees is now live!

The MHA Trustee Hub is an online resource aimed at assisting charity trustees to find practical guidance such as templates, checklists, help sheets and policies, that will support Trustees to improve governance and financial competencies and help charities to adapt to the ‘new normal’ environment post-Coronavirus.

At MHA we pride ourselves on our commitment to the not for profit sector and our clients. Over the years we have seen increasing responsibility within the Trustee role. To help you within your role we have created our own Trustee hub where we will share materials to help and support you in your role.

The initiative is an ongoing project where materials will continue to be updated to provide the most relevant information to charity Trustees.

Go to the MHA Trustee Hub:

Alan Davis

Alan is Chairman of Henderson Loggie, he is also Head of Tax for the Firm and leads our award winning VAT team. He covers all four offices providing specialist advice on technical VAT compliance and advisory, training and development.

Having spent 16 years with HM Revenue & Customs carrying out VAT assurance visits for a wide range of businesses – from small retailers to local authorities, Alan has gained considerable experience of HM Revenue & Customs inspections. He can help with planning opportunities for VAT efficiency, and can advise our clients on retrospective reclaim opportunities, securing significant VAT repayments.

Alan can also advise on other indirect taxes e.g. landfill tax, aggregates levy, climate change levy, and also offers in-house technical updates to the legal profession.

In addition to his tax specialism, Alan leads our Education Sector Group, ensuring that that team meets all the needs of the sector – from audit, to advisory and across all the services the firm provides.

Andy Niblock

Andy provides audit and accountancy services to clients in both the commercial, charitable and agricultural sectors. He trained and worked for a Big 4 firm, and also worked in industry for a period before returning to the profession. Andy is Head of our Agriculture & Rural Team.

Andy has very much a hands-on approach due to his time spent in industry, and understands the practical issues of running a finance function and the issues they are faced with.

Andy also specialises in outsourcing of finance functions, providing this service to companies without their own in house finance team. The service Andy provides means he’s often involved with companies on a day to day basis, providing advice and ensuring their time is freed up rather than worrying about the financial administration side of their business.

Barbara McQuillan

Barbara has worked in taxation and specialised in the owner-managed business sector for over 30 years. During that time she has dealt with a wide range of clients in a variety of sectors ranging from the initial establishment of new businesses, through the growth years and then to retirement or sale. Throughout the life cycle of any business, a great variety of tax challenges arise and Barbara has provided pro-active and practical tax advice at every stage.

Barbara is a member of the firm’s Life Sciences Sector Group and with the team provide a wide range of skills and experience to service an important and substantial sector in the Scottish economy. Barbara is involved in running Corporate and Tax Clinics for one of our major Universities, assisting early-stage companies.

Barbara was for a number of years a Director of MHA Henderson Loggie Financial Planning.

Barbara Walton

Barbara is a corporate tax specialist with over 20 years of experience of advising clients on domestic and international tax, R&D and entrepreneurial tax issues and leads the firm’s R&D and Patent Box group.

She is experienced in corporation tax compliance for private and publicly listed companies, and tax planning for large groups of companies. Her industry experience includes technology, biotechnology and pharmaceuticals, software development, manufacturing and the food industry. Barbara is a member of the firm’s Healthcare and Life Science Sector teams.

David Legge

David is one of the Senior Consultants within the team at MHA Henderson Loggie Financial Planning. He brings 30 years of industry experience to his role within the Firm.

David works extensively with high net worth individuals as well as the SME sector, and for the last 20 years he has developed particular expertise in the area of Self Administered Schemes – SIPP and SSAS. This specialist area of pension planning can also act as a very useful business tool as well as a source of capital. David recently made use of a Self Administered Scheme in helping a family business formulate an exit and retirement strategy with the creative use of a SSAS.

In addition to his pension work David also advises both corporate and individuals on strategic investment and Inheritance Tax Planning.

Fiona Morgan

Fiona works with a variety of owner managed businesses and charities, both large and small, advising them on accounting, taxation and business improvement. Fiona is also responsible for the provision of the audit service within Aberdeen office.

Fiona’s clients operate in numerous sectors including food & drink, tourism, manufacturing, oil & gas service, professional services, retail, property development and recruitment. Working with them from inception through all the crucial phases in the development of a business, she has a personal approach which ensures that she can provide advice and re-assurance when it’s most needed.

Using her experience with Mindshop International, Fiona helps clients develop their businesses through business improvement services, specifically strategic planning, sustainable competitive advantage, family business issues, leadership development, personal development, and lean management..

Jamie Davidson

Jamie is an experienced auditor with strong technical skills who provides audit and accounting services to our clients across a wide range of sectors. He trained with a Big 4 firm and after qualifying in 1987 he gained twenty years of experience before joining Henderson Loggie in 2007.

Jamie has wide commercial experience having worked with clients in many sectors and of all sizes from owner managed businesses to large groups. As well as core audit, Jamie has been involved in large projects for clients involving acquisitions and systems implementation. He brings all of that experience to bear on his client relationships where he seeks to add value in a proactive manner.

Jamie specialises in the audit of charities and works with many high profile Scottish charities. He is head of our charities sector group and sits on the ICAS Charities Committee.

Jim Wilson

Jim is Managing Director of MHA Henderson Loggie Financial Planning, responsible for the overall running of the financial services firm ensuring we offer our client’s pro–active advice in all areas of financial planning.

Jim acts as adviser to a portfolio of private clients and has a particular interest in assisting both companies and individuals with their pensions and personal investment planning both pre and post retirement. He also has a breadth of experience of the financial planning requirements across a broad range of corporate sectors advising on the constantly changing pension legislation and the impact this has on members of defined benefit pension schemes in particular.

Jim holds the Advanced Financial Planning Certificate and is the firms nominated compliance officer and pension transfer specialist.

Ricky Clark

Having worked within the financial services industry since 2006, Ricky has gained valuable career experience within different roles in financial services companies.

At MHA Henderson Loggie Financial Planning Ricky specialises in pensions within the corporate sector, providing advice and project planning services on the new government regulations set out on workplace pension schemes, also known as auto enrolment. He also looks after the needs of a portfolio of personal clients assisting them with pre and post retirement financial planning requirements.