Charity & Not for Profit Considerations
Formations & structureThere is a range of legal entities a charity can choose to adopt, as well as various management structures. We can advise on the best entity for your organisation and if it will be advantageous to change the current structure.
All charities in England and Wales are awarded their status, and are regulated, by the Charity Commission. We advise all those thinking of setting up a charity to visit their website to understand the commitments required by this body. www.charity-commission.gov.uk
Legal entities and managementWe will advise on the most suitable legal entity for operations, whether it be as a charitable company, unincorporated charitable trust, or charitable company with trading subsidiary or a Charitable Incorporated Organization. We can also advise on suitable governance structures, including the make-up of Boards of Trustees, membership, management committees, charity registration and constitution.
Tax and VAT adviceRegistering as a charity does not automatically mean that an entity is exempt from tax, as tax and VAT can be chargeable if a charity's activities are deemed to be trading activities. Tax issues for charities can be complex and Plummer Parsons' experience in the field means we can advise on finding the route that optimises income retention.
One common structure for charities is to establish a charitable holding entity with a trading subsidiary. The subsidiary then gifts its trading profits to the charity. We can establish this group structure and advise on which activities should be in which entity to maximise tax and VAT relief for the group.
We can also assist with:- charity tax repayment claims
- setting up gift aid schemes so that the charity can reclaim tax on donations from individuals
- negotiations with HM Revenue & Customs on activities subject to VAT.
Charity reporting is a complex area and the regulations change frequently.
The format of accounts and reports for charities is very different from reporting for other entities. The distinct regulations and requirements placed on charities are strict and various.
Plummer Parsons keeps itself fully aware of all reporting regulations affecting charities, and produces its accounts in full accordance with the Charities Act and the Statement of Recommended Practice and if appropriate the Companies Acts.
We also assist our clients with the completion of the Annual Return to the Charity Commission.