What government support is available to charities?

INSIGHTS CHARITY SECTOR SPECIAL
15 May 2020: Philippa Kelly, Director of ICAEW’s Technical Strategy Business Group, looks at the business support available for charities.

Early in the coronavirus crisis, the government announced funding for charities comprising £360m to be directly allocated to charities providing key services (including hospices, St John’s Ambulance, victims charities, vulnerable children’s charities and Citizens Advice), and £370m for small and medium-sized charities.

However, many are facing financial challenges and will need additional support. Much of the support available to businesses can also be used by charities. If not already considered, the following schemes and mechanisms may allow charities to continue operating through the crisis and beyond.

Deferring VAT payments to manage cashflow
For those with charity shops, taking advantage of business rates relief and the more recent top-up will benefit small charity properties that meet the criteria for Small Business Rates Relief
Charities should consider using the extended furlough scheme
Consider whether to apply for a Bounce Back Loan or a Coronavirus Business Interruption Loan.

Charities can access the government-backed loan schemes, and the criteria are flexed to reflect the activities of a charity. Charities are not required to confirm that more than 50% of the income of the business (together with that of any member of any group of which it is a part) is derived from its trading activity, as long as they meet the other criteria. The “business in difficulty” criteria or the accumulated losses test do not apply if the charity is a trust or unincorporated association.

For charities in acute financial difficulties, speak to your independent examiner or auditor as a source of advice, as there may be other options available. If you have existing debt, talk to your lender about payment holidays or restructuring. If you have insurance which is not required due to the effects of coronavirus, speak to your insurer about how you best receive the benefit of the premiums, or potentially a refund.

Charities may also be able to amend restrictions to funds due to the current extreme circumstances, allowing them to access cash they would not otherwise be able to, however, this should only be considered if other options are not possible, and there may be longer term impacts, including on financial resilience and donor relationships.

The Charity Commission has further guidance if you are in more severe financial difficulties.

Comments

Meet five advisers who’ll help your business become ‘fit for finance’

Meet five advisers who’ll help your business become ‘fit for finance’ Charlie Gilbert Content Manager Enterprise Nation In our previous post, we covered the topic of how to use any money you raise – with the services of advisers being a crucial area small businesses should consider investing in. These services, however, are often needed before a business applies for funding. Take financial advisers and accountants, for example. Their job isn’t solely about helping you keep on top of your incomings and outgoings; it’s also about making you ‘fit for finance’ – in other words, helping position you as an attractive prospect to lenders or investors. They do this in myriad ways – from increasing profitability by helping you run your business more efficiently, to improving cashflow by advising on, and helping you implement, processes that keep cash in your business (automated payment collections, for example, or credit control). Some advisers will ensure you’re set up to scale by coaching

Fund offers £60 million for businesses looking into sustainable technologies

Fund offers £60 million for businesses looking into sustainable technologies Businesses in England, Wales and Northern Ireland who are looking to develop innovative technology in the energy sector can now bid for a share of up to £60 million in grant funding through the IETF Phase 2: Autumn 2021 competition window. The Industrial Energy Transformation Fund, launched by the Department for Business, Energy and Industrial Strategy is targeted at feasibility and engineering studies, as well as the deployment of industrial energy efficiency and deep decarbonisation projects. Funding will be available to businesses for: Studies - feasibility and engineering studies to investigate identified energy efficiency and decarbonisation projects prior to an investment decision. Energy Efficiency projects - deployment of technologies to reduce industrial energy consumption. Deep Decarbonisation projects - deployment of technologies to achieve industrial emissions savings. Applications are open

What Is the Difference Between Bookkeeping and Accounting?

What Is the Difference Between Bookkeeping and Accounting? Bookkeeping encompasses organising and recording financial information, while accounting involves taking the data, summarising it, analysing, consulting and reporting. This blog will outline the differences that exist between accounting and bookkeeping in detail so that you can tell them apart. Differences between a bookkeeper and accountant An accountancy firm is tasked with the work of assessing and interpreting the financial data of a particular company and reporting on it. For this reason, it’s worth noting that an accountant has greater skill sets compared to a bookkeeper. A bookkeeper has the primary responsibility of handling the recording of financial transactions of a company. An accountant has to hold a certification or degree in CPA. Moreover, his/her salary is better than that of a bookkeeper. In the real sense, a bookkeeper reports to an accountant. On the other hand, a bookkeeper does not need to have any formal

Grant McKnight Blog

Search This Blog