Specialist Areas
We love the Not For Profit Sector. Because it's complex, challenging and so rewarding.
Your passion - Our expertise
Charity Accounts
There are many specialist fields within the realm of accountancy, and many require specialist knowledge and expertise. So why would you go to any accountant to have your charity accounts prepared?
Would you go to your dentist if you had a sprained ankle? They're a doctor, for sure!
The comparison is perhaps a little extreme, but the concept is this - charity accounting is a highly regulated and complex area with its own regulator, its own rules and its own reporting standard and to make sure your charity is compliant and does not fall foul of the Charity Commission's standards, it is vital that you chose an accountant with the relevant experience and knowledge of the Charities Act and the SORP. Cue ... K-VS.
We are highly experienced preparing accounts for both company and non-company charities for submission to both the Charity Commission and Companies House, and we can advise which method of preparation is the most suitable - or required - option for your charity.
Charity Bookkeeping & Gift Aid
As a general rule we recommend that any entity with more than 5 transactions per month use bookkeeping software, and we highly recommend Xero. Honestly, not using software is a false economy - the time and hassle that can be saved by using software cannot be measured in gold.
This is certainly the case for any small entity, but the more so for charities that have to juggle different funds and allocation of income and expenditure to different projects.
We can assist with this, running your charity's bookkeeping on a weekly or monthly basis, ensuring that your charity always has up to date figures at the click of a button. Or if you have the relevant expertise to carry out the regular bookkeeping yourself, but need a helping hand with the setup - funds and all - we'd be delighted to do this for you.
Generally, gift aid also falls within this realm. If your charity receives donations from individuals, those donations may be eligible for gift aid. In practical terms this means that once your donor has formally confirmed to you that they are a UK taxpayer, your charity can reclaim the tax already paid on those donations from HMRC. In other words, you get an extra 25% back from HRMC - whilst at the same time potentially saving your donor some serious money.
We can help set up your gift aid scheme with HMRC and submit gift aid claims. We can also advise on time-limits and eligibility for gift aid - it is vital that the requirements are clearly communicated to the donor as it is vital that the donor is a UK taxpayer.
Lean back and leave it to us - and rest assured that your affairs are always up to date whilst maximising the impact of the donations you receive.
Charity Independent Examination
Any charity with income in excess of £25,000 requires an independent examination. This is a form of scrutiny where an examiner reviews the charity's financial statements to ensure they are internally consistent, compliant with the relevant legislation and agree to the underlying bookkeeping records. The objective is to assure donors and other interested parties that the charity's financial affairs are in order.
There are no set rules who can do an independent examination for charities with income of up to £250,000. The general understanding is that the examiner should be an individual with relevant qualifications. As evidenced by a report published by the Charity Commission, only 70% of Charities with income over £25,000 - aka those requiring an independent examination - met the basic benchmarks required by the Charity Commission, indicating that these qualifications may not always be present. It is therefore essential to chose an experienced examiner who is familiar with all the requirements of the SORP and the Charities Act.
If your charity's income exceeds the £250,000 threshold, a few more considerations need to be taken into account.
If your charity has assets of less than £3.26m, you can opt to have an independent examination up to an income level of £1m, however, in this case your independent examiner must be a member of a recognised professional body, such as the Association of Chartered Certified Accountants or the Institute of Chartered Accountants in England and Wales. As a member of the Association of Chartered Certified Accountants we meet this requirement.
If your income exceeds £1m, or if your charity holds assets in excess of £3.6m - which in practical terms would mainly impact charities with larger investment portfolios or charities holding property - then this is the end of the road for you with regard to independent examinations. At this point, you have earned the badge of honour to require a statutory audit.
Charity Governance
The Statement of Recommended Practice - is not necessarily the easiest read, and neither is the Charities Act, and whereas we would recommend that trustees are familiar with both, we're here to help.
As trustees, you are essentially the directors of the charity and responsible for its smooth running and its compliance with rules and regulations, some of which you may not immediately be familiar with. We therefore recommend contacting a trusted adviser before making significant - and perhaps sometimes not so significant - decisions in connection with the running of your charity.
The list of areas is too large to cover here, but main areas we can assist with is advising trustees in connection with the responsibilities that come with being a trustee and how these can be discharged, as well as making sure trustees remain compliant with all the legislation that governs the Third Sector.
Residential Service Charge Accounts
Service charge is payable when a property comprises several units, such as a block of flats, this is to distribute communal costs across the individual leaseholders. Such costs usually include property insurance, communal electricity and general upkeep and property management costs. In addition to the service charge, there is often a sinking fund, covering less frequent but larger repairs, such as the cost of a new roof.
The service charge payable by leaseholders is usually based on the expenses incurred in the prior year, therefore it is vital to capture those expenses completely and accurately.
We work together with residential management companies to ensure compliance with the Landlord and Tenant Act 1985.
Commercial Service Charge Accounts
Commercial Service Charges are similar in nature to residential service charges in that they split the shared costs of running a property between its individual leaseholders. As those leaseholders are commercial entities, the rules that apply differ from residential service charges in so far as there is less focus on legislatory requirements and more on the individual lease agreements.
Guidance is provided by the Royal Institution of Chartered Surveyors (RICS) code of Practice, Service Charge in Commercial Property (2014). As this code is non-mandatory, it is ever more important to use the services of an experienced professional to ensure commercial property leaseholders are provided with accurate and timely information.
Service Charge - Agreed Upon Procedures
Generally, residential service charge accounts require some form of scrutiny by an independent professional. This is to ensure that the accounts follow the required format and include all the required information as stated by the Landlord and Tenant Act 1985. Although not governed by this act, commercial service charge accounts may also benefit from independent scrutiny to ascertain compliance with the RICS guidance.
The legislation states that only a qualified accountant is eligible to certify service charge accounts. In practical terms, this means the accountant needs to be a member of a recognised professional body, such as the Association of Chartered Certified Accountants (ACCA) or the Institute of Chartered Accountants in England and Wales (ICAEW). This is to ensure that accountants certifying service charge accounts have the necessary qualification and experience to do so. It should be noted that there is no requirement in the UK for an individual or firm to hold any professional qualification in order to practice as an accountant.
However, as with all specialist areas, regardless of professional membership, it is vital to chose an accountant with the relevant experience in the field.
CIC - Set up Advice
If you want to make a difference in your community without having to follow the strict requirements set by Charity regulations, then a Community Interest Company(CIC) may be the right vehicle for you.
At K-VS we have extensive experience advising on the suitability of this non-profit organisation, making sure that all circumstances are considered to ensure that you can make an informed decision which option is the right for your cause.
CIC - Financial Statements
Whereas not as detailed as Charity Accounts, there are a number of areas where CIC accounts differ from for-profit company accounts, and our experience ensures that your CIC is compliant with the regulations set by the Companies Act and The Office of the Regulator of Community Interest Companies.
And of course we are always at hand with helpful advice when it comes to the implementation of controls and financial systems for your CIC on a day-to-day basis.
CIC - Taxation
A general misperception is that non-profits are exempt from paying tax. Whereas it is true that most non-profits will not pay any tax, the devil can often be in the detail.
We will ascertain that the correct steps are followed to make your CIC tax efficient to enable you make the maximum impact on the community you serve.
