Charities need to make the best of their finances, but in an increasingly complex minefield of tax and accounting legislation, it’s easy to go wrong. To ensure that your charity’s finances are in the best possible shape, you need expert help.
Fawcetts are the experienced professionals. We have undertaken work in your sector to achieve great results for charities, helping them make the most of their income while planning for expansion or development. We offer a complete financial services package or we can undertake individual projects depending on your needs.
Financial management is no simpler because you are a charitable organisation. In fact, this can lead to even more rules and regulations that need to be taken care of. Volunteers and paid employees at any charity will already have a full-time job without having to learn and handle technical financial matters.
Employing the service of the experts is the most cost-effective solution. This can save you time: for example, just assessing an item of income could involve consideration of the following:
- The objects of the charity
- The value of the item concerned
- When it is to be received
- Who it is to be received from
- Why it is being received
- The VAT consequences of its receipt
- The corporation tax consequences of its receipt
- The requirements of Accounting Standards
- The requirements of the Charities SORP
- Accounts disclosure issues.
This is just one example of the complexity facing professional charity finance managers.
Fawcetts can advise on how to implement and establish systems to categorise and process routine transactions. Our team also has vast expertise in the issues affecting financial management and reporting in the sector.
We couple this with an excellent working relationship and tailor our service to your individual needs. We maintain regular contact with our clients, not just during the audit, but throughout the year, and we build this into our overall approach to servicing a client.
We believe that investing the time to do this pays dividends at many levels over the longer-term. At the simplest level, a thorough understanding of our client’s situation allows us to target our audit work more effectively. This means we spend less time in arriving at our audit opinion – keeping annual compliance costs at an effective minimum. Where more complex issues arise, our charities team has the detailed knowledge of their clients’ circumstances to allow them to take all relevant factors into account.
This means advice is delivered more quickly and is tailored to the charity’s particular situation. It also allows us to suggest solutions that would not arise from an off-the-shelf reiteration of the relevant rules and regulations.
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Figures released by HM Revenue & Customs (HMRC) show that the UK’s tax gap – the difference between tax owed and actual receipts – is continuing to fall.
The Revenue has revealed that the tax gap for the 2016-17 tax year was 5.7 per cent, down from six per cent in the previous year and 7.3 per cent in 2005-06. It says that, had the tax gap not fallen, a total of £71 billion less tax would have been collected last year.
The figures show that of the total tax that was unpaid, the largest proportion was from small businesses, with £13.7 billion not paid.
According to HMRC, taxpayer error was nearly twice as likely as criminality to be the culprit for missing tax, with errors costing the Revenue £9.2 billion in lost income, while criminality cost £5.4 billion.
Meanwhile, Income Tax, National Insurance and Capital Gains Tax had the biggest tax gap at £7.9 billion. The VAT gap, on the other hand, has fallen from 12.5 per cent in 2015-06 to 8.9 per cent in 2016-17.
Mel Stride, Financial Secretary to the Treasury, said: “These really positive figures show that the tax gap is the lowest in the last five years, which reflects the hard work that HMRC and I have been doing to ensure we support businesses to pay the right tax at the right time and clamp down on tax evasion and avoidance.
“Collecting taxes is essential for funding our vital public services such as the NHS – indeed, had the tax gap remained at its 2005/06 level the UK would have lost £71 billion in revenue destined for public services, enough to build 200 hospitals.”
Jon Thompson, Chief Executive of HMRC, added: “The UK is the only country in the world to regularly publish their tax gap in detail and at 5.7 per cent, it remains at its lowest for five years. I am pleased that the downward trend shows HMRC and HM Treasury’s continued hard work to tackle evasion and avoidance is working.
“HMRC is also working hard to help taxpayers get their tax right by offering support and investing in digital services to improve businesses’ record keeping and reduce errors.”
The Revenue is now touting the forthcoming launch of its flagship Making Tax Digital programme as the latest weapon in its arsenal as it looks to reduce the tax gap further.