Financial Information Update | Global Connections

Financial Information Update

National Insurance: New rules for the collection of Class 2 contributions came into effect in April 2015. It was thought that the government had planned to abolish class 2 national insurance, but this was withdrawn in the 2018 budget.  As such, the class 2 VDW category for volunteers working overseas, and the need to pay the higher rate of Class 3 to protect pension rights, remains in situ.  More information can be found on the gov.UK website.

Minimum Wage: The National Minimum Wage levels (NMW) and National Living Wage levels have been combined, but apply to different age groups. You must be at least school leaving age to get the NMW and aged 25 or over to get the NLW. From April 2021 that National Living Wage will apply for those aged 23 and over.  From April 2020 to hourly rates will be:

  • 25 and over - £8.72
  • 21 to 24 - £8.20
  • 18 to 20 - £6.45
  • Under 18 - £4.55
  • Apprentice - £4.15

More information is available at www.gov.uk/national-minimum-wage

Accruals accounts – guidance and templates: The Charity Commission has published the following, to help non-company charities with incomes of less than £500,000 prepare their trustees’ annual report and accrual accounts in accordance with Charities SORP FRS 102:

Charity Commission Guidance: The Charity Commission revised the guidance on charity reserves (see Charity Reserves: building resilience - CC19) in January 2016. They also updated the guidance on Managing a Charity's Finances, with particular emphasis on managing difficulties and insolvency.

Some key highlights of financial matters that have come into effect recently

  • Pensions auto-enrolment. Employers are expected to offer a qualifying pension scheme to their staff based on their staging date which can be obtained 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. There are clear deadlines for providing information to the Pensions Regulator and fines for failure to comply. Global Connections operates a group pension scheme for its member agencies but there are limited numbers of places available.
  • Since April 2014 employers have been able to claim the Employment Allowance and reduce their employer Class 1 National Insurance contributions (NICs). If you are eligible, you are able to reduce your employer Class 1 NICs by up to £3,000 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.
  • In April 2014, the scheme for small employers which enabled the reclaim of SSP was abolished. Employers are now able to keep records in a more flexible way which best suits their own business needs.