Financial Information Update
The Charity Commission for England and Wales recently published the analysis of the consultation on the draft new Statement of Recommended Practice (SORP), which provides a framework for charity accounting and reporting, and all charities that prepare their accounts on a 'true and fair' basis ('accruals accounts') must follow it. The SORP does not apply to small charities choosing to prepare receipts and payments accounts. The new SORPs will apply to accounting periods starting on or after 1 January 2015.
Look at the forum presentation on SORP from February 2014. Some decisions made following the consultation include:
- There will be two SORPs: one based on the new FRS102 and the other on the FRSSE. Charities can choose which accounting standard and SORP they use depending on their size.
- All charities that submit accruals accounts under the SORP must disclose staff pay in bands over £60,000, with larger charities disclosing their pay and remuneration policy for senior staff in their trustees' annual report
Below are some highlights relating to changes and resources that affect charities which are due to take effect in 2014. HMRC also produce a helpful employer's bulletin.
Some key highlights of financial matters that are planned to come into effect during 2014
- In 2014 the Charity Commission plans to review both charities with pension deficits and also high governance costs. They plan to toughen their approach, and will become more policeman than an advice giver and mediator. The vast majority of its work in the last year was concerned with fraud, financial abuse and mismanagement.
- Pensions auto-enrolment - employers with 350-499 employees will be expected to offer a qualifying pension scheme to their staff by the start of 2014.Other employers should check their staging date by entering their PAYE reference into a tool on The Pensions Regulator’s website. The date will also appear on any letters the regulator sends directly to an employer about their duties.In addition, from April 2014, the time period for employers to auto-enrol eligible jobholders into a qualifying pension scheme is extended from 1 month to 6 weeks. The deadline for providing information to the Pensions Regulator is also extended. Global Connections operates a group pension scheme for its member agencies but there are limited numbers of places available.
- From 6 April 2014 employers can claim the Employment Allowance and reduce their employer Class 1 National Insurance contributions (NICs). If you are eligible you can reduce your employer Class 1 NICs by up to £2,000 each tax year. You can claim the Employment Allowance if you are a business or charity that pays Employer Class 1 NICs on your employees’ or directors’ earnings.
- From 6 April 2014, the scheme for small employers which enabled the reclaim of SSP was abolished. Employers have until the end of the 2015-16 tax year to recover SSP paid for periods before the end of the 2013-14 tax year.The SSP record-keeping requirements associated with PTS has also been abolished from 6 April 2014. Employers will be able to keep records in a more flexible way which best suits their own business needs.
- Changes to the levels of the national minimum wage take place from 1st October 2014. The adult rate increases from £6.31 to £6.50 per hour, 18 to 20 year olds from £5.03 to £5.13 per hour, 16 to 17 year olds from £3.72 to £3.79 per hour and the apprentice rate from £2.68 to £2.73 per hour