Financial Information Update
National Insurance: New rules for the collection of Class 2 contributions came into effect in April 2015. However it is intended to the abolish Class 2 in the next few years. There is currently a government consultation on this measure. However the current plans will mean the removal of Class 2 VDW category for volunteers working overseas, and the need to pay the higher rate of Class 3 to protect pension rights, probably from April 2020.
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 2017 to hourly rates will be:
- 25 and over - £7.50
- 21 to 24 - £7.05
- 18 to 20 - £5.60
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:
- Accruals Accounts pack (CC17) – SORP FRS 102
- Charity accounting templates: accruals accounts (CC17) - SORP FRS 102
- Independent examiner’s report template - SORP FRS102
- Trustees’ annual report template - SORP FRS102
Charity Commission Guidance: The Charity Commission issued a new version of CC17 Guidance on Reserves Policies in 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 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.