Charity Commission Opens Online System for Annual Returns

Charity Commission Opens Online System for Annual Returns

After a delay due to a technical issue the Charity Commission has now opened its online system for submitting annual returns. The system was originally scheduled to go live towards the end of April. But due to the delay it was not released until 5th of May.

 

What is a Charity Annual return?

A charity annual return is an online form that charities in England and Wales are required to submit by law to the Charity Commission each year. The return requires you to answer specific questions regarding your charity as well as including copies of the trustee annual report and financial statements (audited or independently examined) for larger charities. The aim of submitting an annual return to the Charity Commission is to provide them with a clear picture of the charity’s financial position and activities throughout the year.

For smaller charities in particular this task can sometimes be time consuming. However, there are benefits to these requirements and you are given 10 months from the end of your financial year to file the annual return. The return must be completed online by logging into your Charity Commission account.

If you would like to find out more about preparing a charity annual return, please visit the government website here: https://www.gov.uk/guidance/prepare-a-charity-annual-return

 

How can we help?

At Hawsons we recognise that not-for-profit organisations have very different requirements from other businesses and are currently exposed to a challenging economic climate.

Our dedicated team fully understands the complex, ever-changing regulatory requirements of the charity and not-for-profit sector. Irrespective of your size we wish to support you to maximise the benefits you could achieve through our specialist professional advice.

Charities & not-for-profit organisations are currently facing extensive changes in their regulatory and legal framework. Given the additional pressures on fundraising, complex tax regimes, internal risk exposure, and stakeholder demands, it has never been more important to obtain specialist

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Free initial meeting

Simon Bladen

Partner, Sheffield

0114 266 7141
Paul Wormald, Partner

Paul Wormald

Partner, Doncaster

01302 367 262
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Charities Statement of Recommended Practice

Charities Statement of Recommended Practice

A revised version of the Charities Statement of Recommended Practice (SORP) is set to be updated from 1 January 2024. This is less than two years away.

The charities SORP was first introduced in 2015 and updated in 2019 to clarify and reflect amendments and changes to FRS 102.

 

The development process

The Charities SORP development process was created to discuss recommendations in the governance review which ended in 2019. The review recommended that greater focus was needed on small charities and wider engagement was required with stakeholder groups when the Charities SORP was developed.

These recommendations were acted on in February 2020 as six stakeholder groups were created called ‘strands’. Since the strands were created, they have been liaising with UK charity regulators. Subsequently the SORP-making body known as the SMB and the Charities SORP Committee was formed.  

The six strands that were created are:

·         Trustees

·         Smaller charities and independent examiners;

·         Professional and technical (qualified accountants specialising in charities, mainly audit)

·         Larger charities;

·         Major funders, donors, government and public bodies;

·         Academics, regulators and proxies for the public interest.

Once the six strands were formed the first order of business was to conduct an initial analysis of the amendments to the Charities SORP. During this analysis by the strands seventeen topics were raised for deeper analysis and they invited the Charities SORP Committee to create proposals to amend the Charities SORP.

The strands choose the following topics for in depth analysis:

·         A more tiered approach to concessions for charities of different sizes;

·         Charity reserves;

·         Accounting for donated goods and services;

·         Grant accounting;

·         Income recognition;

·         Impact reporting;

·         Sustainability reporting.

 

What now?

After in-depth analysis the Charities SORP committee will now begin work on drafting a consultation of the Charities SORP next edition throughout 2022. This consultation draft is planned to go to public consultation at the beginning of 2023.

The SMB’s published their aims and principles for drafting the next edition of the Charities SORP (FRS 102) in January 2022. There were four main aims:

‘Firstly the SORP is to address the needs of the main users who make use of a charity’s annual report and accounts who do not have the power to require specific information of a charity.’

‘Secondly in drafting the SORP we seek to comply with Financial Reporting Council’s (FRC) requirements that the: ‘SORPs should be developed in line with current FRC standards and best practice.’

‘Thirdly we aim to promote consistency across the charity sector by recommending a preferred treatment, approach or methodology.’

‘Lastly, we aim to keep our recommendations relevant to the socioeconomic context in which charities operate by retaining the advice of an expert SORP Committee.’

More details about these aims can be found in the SORP making body’s statement of drafting aims and principles.

These four aims are designed in a way where the Charities SORP should meet the needs of people that prepare and use trustees’ annual reports and financial statements.

This year the FRC is planning to publish an exposure draft of FRS 102 for public consultation following an initial call for input. Once the final changes to FRS 102 are confirmed, these will be implemented in the final edition of the Charities SORP (FRS 102).

In response to the FRC’s call for input, the Charities SMB provided some recommendations to the Charities SORP. These recommendations included a significant point ensuring that the same concessions available for commercial businesses are also available for charities.

 

How can we help?

At Hawsons we recognise that not-for-profit organisations have very different requirements from other businesses and are currently exposed to a challenging economic climate.

Our dedicated team fully understands the complex, ever-changing regulatory requirements of the charity and not-for-profit sector. Irrespective of your size we wish to support you to maximise the benefits you could achieve through our specialist professional advice.

Charities & not-for-profit organisations are currently facing extensive changes in their regulatory and legal framework. Given the additional pressures on fundraising, complex tax regimes, internal risk exposure, and stakeholder demands, it has never been more important to obtain specialist professional advice.

Free initial meeting

Simon Bladen

Partner, Sheffield

0114 266 7141
Paul Wormald, Partner

Paul Wormald

Partner, Doncaster

01302 367 262
Richard Burkimsher, Partner

Richard Burkimsher

Partner, Northampton

01604 645 600

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Utilisation of Legal Data

Utilisation of Legal Data

What is Legal Data?

Legal data is information classified as regarding law and is generated from multiple formats including time recording, knowledge banks, spreadsheets, legal documents, billing systems and more. This data is used in all areas of practice law. It is believed that the data represents a £3billion market opportunity in productivity gains alone for the legal sector.

Previous studies have shown:

  • 20% of lawyers believe their organisation captures data effectively
  • 80% of General Counsels are not confident in their departments’ ability to identify and manage legal risk

 

What is the Legal Data Vision?

LawtechUK have recently launched a project called The Legal Data Vision which is supported by the Open Data Institute. The Legal Data Vision has been created to try and take full advantage of the opportunities that data can provide in vital areas such as decision-making, innovation, value generation, risk mitigation, and efficiency.  The aim of the Legal Data Vision is to prioritise the responsible use and access of legal data to benefit the legal sector as a whole. However, the full potential of this project cannot be unlocked unless there is a unified effort across the legal data ecosystem. A unified effort into the Legal Data Vision will result in a greater innovation and a more sustainable legal sector that will elevate public trust.

 

Why should my firm get involved with the Legal Data Vision?

Traditional legal data collecting methods used in the recent past are no longer considered an effective method of working in the 21st century. The amount of data now available is constantly growing and legal firms are currently operating within constraints of increasing complexity, oversight, uncertainty and scrutiny. Many professionals operating in the legal sector have now recognised the importance of legal data to better meet their client’s needs and support innovation.

Implementing and having shared access to legal data can improve efficiency, productivity, and transparency. Data-led innovation can also help identify new business models, revenue lines and assist with addressing unmet and excluded legal needs. A legal data ecosystem which is strong and trustworthy with widespread access can be pivotal in helping legal firms make better decisions.

If professionals within the sector want to unlock the full value of data, then a unified commitment will be needed to treat data as an asset to increase capture rates. It is important to note that the overall goal is not for firms or professionals to exploit data. Instead, it should be seen as a valuable resource that will drive innovation and help deliver positive outcomes for legal services. If legal professionals commit and adhere to responsible data sharing, then this should benefit the productivity of the sector as a whole.

 

How can my firm get involved with the Legal Data Vision?

Within the Legal Data Vision is a framework that outlines how individuals operating within the legal sector can contribute in their own way to help achieve this vision.

 

How can we help?

Hawsons is one of the few accountancy practices with a dedicated team of solicitor accountants specialising in the needs of solicitors and legal professionals.

We act for a large number of law firms across all three of our offices and offer a wide range of services which are tailored to meet their individual needs. Our legal client base consists of a multitude of firms of varying structure and size, from sole traders to limited companies and LLPs with corporate members.

Our understanding of the unique issues that many in the sector are facing, combined with our technical experience, allows our solicitor specialists to provide you with proactive, commercial and informed accountancy and tax advice.

Free initial meeting

Simon Bladen

Partner, Sheffield

0114 266 7141

Martin Wilmott

Partner, Doncaster

01302 367 262
Richard Burkimsher, Partner

Richard Burkimsher

Partner, Northampton

01604 645 600

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Proposed rule changes on fundraising announced

Proposed rule changes on fundraising announced

From this Autumn rules are changing which should make it easier for charities to access money donated in a fundraising campaign that did not reach or exceed its planned target. The Charities Act 2022 received royal assent in February and a plan has now been implemented by the government. The department for Digital, Culture, Media and Sport (DCMS) will complete a statutory review of the Act every 3-5 years following the grant of Royal Assent.

 

What measures are set to come into force?

Autumn 2022

In the autumn of 2022 changes are expected to be made in the following areas:

  • Power to amend Royal Charters
  • Ex gratia payments
  • Remuneration to trustees for providing goods and services to their organisation

 

Future planned changes

Spring 2023

In the spring of 2023 changes are expected to be made in the following areas:

  • Permanent endowment
  • Charity land
  • Amendments of the Universities and College Estates Act 1925

 

Autumn 2023

In the autumn of 2023 changes are expected to be made in the following areas:

  • Charity constitutions
  • Powers relating to appointment of trustees
  • Remuneration of charity trustees
  • Charity mergers

 

The implementation of the changes will be led by the department for Digital, Culture, Media and Sport (DCMS) alongside the Charity Commission additional government departments will become involved when needed.

 

How can we help?

At Hawsons we recognise that not-for-profit organisations have very different requirements from other businesses and are currently exposed to a challenging economic climate.

Our dedicated team fully understands the complex, ever-changing regulatory requirements of the charity and not-for-profit sector. Irrespective of your size we wish to support you to maximise the benefits you could achieve through our specialist professional advice.

Charities & not-for-profit organisations are currently facing extensive changes in their regulatory and legal framework. Given the additional pressures on fundraising, complex tax regimes, internal risk exposure, and stakeholder demands, it has never been more important to obtain specialist professional advice.

Free initial meeting

Simon Bladen

Partner, Sheffield

0114 266 7141
Richard Burkimsher, Partner

Richard Burkimsher

Partner, Northampton

01604 645 600
Paul Wormald, Partner

Paul Wormald

Partner, Doncaster

01302 367 262
Small Charity Mergers on the Rise

Small Charity Mergers on the Rise

A recent report has found that the number of small charities merging is on the rise. The annual Good Merger Index published by Eastside Primetimers showed that between 1 May 2020 and 30 April 2021, 77 mergers took place which involved 166 charitable organisations. Whilst this was a relatively small sample size the index did say that this was the highest number of mergers recorded within the last eight editions of the index.

 

Why are the mergers taking place?

A popular school of thought as to the reason for these mergers between smaller organisations is due to financial distress. Research from the report suggests that the mergers were often financially motivated rather than a strategic move.

£33.1m was the value of the top three mergers within this time frame, which is a significant (£88.2m) decrease from the year before. The total value of income transferred via mergers decreased by over £100m compared to the previous year (£62m compared to £176m previously). This evidence strongly suggests that fewer mergers have taken place among larger organisations and more have taken place between smaller organisations. The pandemic and other economic factors in recent years have made it more difficult for smaller organisations resulting in greater merger activity in order to survive. Whereas larger organisations that are better able to manage the economic storm can either stop or defer plans resulting in the reduction of more complex merger activity.

 

What charities should consider before merging?

If you are considering merging with another charity or not-for-profit organisation then there are a few things you need to consider. Firstly, you need to ensure that merging is going to be a beneficial move for your organisation and you need to weigh up the benefits, costs, barriers and risks of merging. Secondly, you need to have detailed discussions with the organisation you’re merging with about their objectives and any operational synergies that may be achieved as a result. It is vitally important to ensure that each parties’ objectives are compatible. The process of merging should not be rushed as various factors need to be considered by both parties to ensure the merger is beneficial for both. If the merger is not carefully worked through this could cause a divide within the organisation going forward.

 

What Next?

If you are considering a merger with another organisation, our experienced Corporate Finance team can advise you through the whole process to ensure that the merger is right for you. At Hawsons we offer a no-obligation free initial meeting to all new clients. Book yours here!

 

More from our charity experts

At Hawsons we recognise that not-for-profit organisations have very different requirements from other businesses and are currently exposed to a challenging economic climate.

Our dedicated team fully understands the complex, ever-changing regulatory requirements of the charity and not-for-profit sector. Irrespective of your size we wish to support you to maximise the benefits you could achieve through our specialist professional advice.

Charities & not-for-profit organisations are currently facing extensive changes in their regulatory and legal framework. Given the additional pressures on fundraising, complex tax regimes, internal risk exposure, and stakeholder demands, it has never been more important to obtain specialist professional advice.

Free initial meeting

Simon Bladen

Partner, Sheffield

0114 266 7141

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Legal Sector Salaries Set to Climb in 2022

Legal Sector Salaries Set to Climb in 2022

It’s no secret that many sectors are facing severe wage inflation with many locked in ongoing battles to retain their best staff. Indeed, as the economy begins to open up as Omicron-related restrictions are eased, many legal firms in particular are facing a backlog of demand for services which were delayed during the pandemic. A recent survey by recruitment consultancy firm Robert Walters found that many in the professional services sector are planning to increase their pay rise budget by 10-15% in 2022. These sort of levels have only been seen in recent times when inflation has been much higher than currently reported.

 

New hires receive increased salary offers

The current success of the Covid-19 vaccine programme and the gradual easing of restrictions in 2021 had an understandably positive effect on business confidence. However, as demand for services increases, a shortage of candidates combined with bottled-up demand for people and renewed investment now means a power shift towards candidates as firms work even harder to convince the best talent to join them. Inevitably that has meant an increase in salary offers which can have a domino effect on existing pay structures.

 

Existing employees also set for pay rises

Whilst new employees are seeing increased salary offers to convince them to join, many existing employees’ salaries have not increased as rapidly over the past 12-18 months. However, this is expected to change throughout 2022 at most levels with some significant increases expected. Recent reports have also found that existing staff are being put under increasing pressure due to staff shortages which can lead to time off work or even looking for alternate opportunities, compounding the issue.

 

What do professional staff look for?

Over the past two years, the main questions potential joiners want answered center around remote working, flexible working arrangements, holiday entitlement, and compensation. In professional services, the trend has been toward compensation packages, especially in the past 6-12 months where many recruits take the ability to remote work and flexible hours as expected, especially in the legal sector where many roles can be done through a combination of on-site and off-site working.

 

How can we help?

At Hawsons we have a dedicated team of solicitor accountants at our offices in Sheffield, Doncaster, and Northampton.  We act for a large number of law firms across all three of our offices and offer a wide range of services which are tailored to meet their individual needs. Our legal client base consists of a multitude of firms of varying structure and size, from sole traders to limited companies and LLPs with corporate members.

Our understanding of the unique issues that many in the sector are facing, combined with our technical experience, allows our solicitor specialists to provide you with proactive, commercial and informed accountancy and tax advice.

More from our legal sector experts

You can find all of our latest legal sector news and newsletters here.

If you are looking for advice in a particular area, please get in touch with your usual Hawsons contact.

Alternatively, we offer all new clients a free initial meeting to have a discussion about their own personal circumstances – find out more or book your free initial meeting here. We have offices in Sheffield, Doncaster and Northampton.

Free initial meeting

Simon Bladen

Partner, Sheffield

0114 266 7141

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