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SORP 2015 bite size guidance: Income recognition

Posted on: October 23rd, 2014 by Sarah Case No Comments
Sarah Case, Director, Broomfield & Alexander

Sarah Case, Director, Broomfield & Alexander

Welcome to our series on SORP 2015 where the specialist charities and not for profit team at Broomfield & Alexander will bring you bite size guidance on the changes that SORP 2015 will bring to your organisation.

In this series we’ve looked at a number of changes specific to SORP 2015 and we continue now with changes to income recognition.

As a consequence of FRS 102 the FRS 102 SORP changes income recognition in charities. Previously income under SORP 2005 was recognised when there was entitlement, an ability to measure it and that it was virtually certain that it was receivable.

The changed rules under FRS102 SORP for income recognition are as follows:

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SORP 2015 bite size guidance: Trustees report – requirements

Posted on: October 20th, 2014 by Sarah Case No Comments
Sarah Case, Director, Broomfield & Alexander

Sarah Case, Director, Broomfield & Alexander

Welcome to our series on SORP 2015 where the specialist charities and not for profit team at Broomfield & Alexander will bring you bite size guidance on the changes that SORP 2015 will bring to your organisation.

We’ve already looked at the new terminology of SORP 2015 and the differences between FRS102 SORP and FRSSE SORP and in this bite sized article we focus on the requirements of the Trustees’ Report.

The primary purpose for the Trustees Annual Report is to ensure that the charity is publicly accountable to its stakeholders for the stewardship and management of the funds it holds. Trustees should consider this when preparing their Trustees’ Reports. SORP 2015 notes that the documents should provide a fair and balance review.  A good report will explain what the charity is set up to do, how it goes about it doing this and what is achieved as a result of this work.

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Reserves: what level of reserves should your charity hold?

Posted on: October 17th, 2014 by Sarah Case No Comments
Sarah Case, Director, Broomfield & Alexander

Sarah Case, Director, Broomfield & Alexander

This is an age old question, and one you will not find a definitive answer to on the Charity Commission website. The guidance tells us that the level of reserves should be justifiable in relation to the current position and future prospects of the charity.

If you want to benchmark the amount you need, consider if a reasonable, prudent person would feel the current needs of the charity are balanced against its future plans.

Charities must also be aware of the need to look at this reserves figure in relation to its ‘free reserves’ thereby separating out restricted reserves, designated reserves and those reserves held in fixed assets.

There are various methods of calculating the level of reserves a charity requires for example you can look at the risk; you should firstly examine the risk associated with your income streams. You then need to review the expenditure commitments and finally review your risk register and the risks you have identified therein.

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Second Motor Trader MHA Dealer Confidence Barometer shows a change in levels of optimism

Posted on: October 16th, 2014 by Matthew Thomas No Comments
Matt Thomas, Director, Broomfield & Alexander

Matt Thomas, Director, Broomfield & Alexander

MHA and Motor Trader’s second joint industry barometer survey shows that the optimism shown at the beginning of the year has certainly been eroded in the second half of the year, particularly in relation to margins and the delivery of profit levels

Steve Freeman, MHA Head of Motor Sector and Partner at MacIntyre Hudson comments “My dealer clients, whilst continuing to deliver strong volume growth and good profits, are now setting full year profit expectations more cautiously than anticipated in the first half of the year, principally due to the margin pressures from increased manufacturer targets.”

The survey also shows that whilst sourcing used cars clearly remains a challenge for many dealers, those who have excelled in this area and maximised the impact of their websites have generated very strong used car profits.

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Medical Technologies Launchpad Wales

Posted on: October 16th, 2014 by Mike Fenwick No Comments
Mike Fenwick, Director, Broomfield & Alexander

Mike Fenwick, Director, Broomfield & Alexander

Innovate UK has launched a new £1m Launchpad grant fund to support innovative research and development projects undertaken by medical technology businesses in Wales. The fund is aimed at early stage companies with significant growth potential.

The Launchpad will not only provide grant funding for individual projects but the objective is also to provide a range of business support to successful applicants and develop a cluster of innovative companies who are able to collaborate and support each others development. Similar schemes have already been launched in other parts of the UK, for example Tech City in Shoreditch.

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SORP 2015 bite size guidance: Which SORP should I use, and why do I have a choice?

Posted on: October 16th, 2014 by Joanne Taylor No Comments
Joanne Taylor, Charities Manager, Broomfield & Alexander

Joanne Taylor, Charities Manager, Broomfield & Alexander

Welcome to our series on SORP 2015 where the specialist charities and not for profit team at Broomfield & Alexander will bring you bite size guidance on the changes that SORP 2015 will bring to your organisation.

Our first bite sized article dealt with the terminology of SORP 2015 with must, should and may and now we look at the two parts of SORP 2015.

SORP 2015 comes in two parts, FRS102 SORP and FRSSE SORP… because life just wasn’t complicated enough!

But which one should you use?

For those of you who do not meet the requirements to allow you to use the FRSSE there is no decision required, FRS102 is your SORP.

For those of you who are currently able to follow the FRSSE you have a choice, but how do you decide?

There is currently uncertainty surrounding the FRSSE and potentially you could be applying a standard that will be obsolete in 12 months time, at which point you would need to apply FRS102 or the standard that replaces the FRSSE. However, nothing is certain and therefore you may wish to continue with the FRSSE SORP and wait and see what develops before applying FRS102 SORP.

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Changes ahead? Simplified reporting of Expenses and Benefits

Posted on: October 13th, 2014 by Sarah Curzon No Comments
Sarah Curzon, Tax Director, Broomfield & Alexander

Sarah Curzon, Tax Director, Broomfield & Alexander

HM Revenue & Customs (HMRC) have issued a number of consultations in relation to the simplification of the treatment of expenses and benefits. The purpose of these changes is to reduce the administrative burden for employers, individuals and HMRC and simplify the process of dealing with expenses and benefits.

The areas of consultation are:

Abolition of the £8,500 threshold.

Currently where an employee is paid over £8,500 any expenses and benefits provided are reportable on a form P11D. however, where pay plus benefits in kind are less than £8,500 then a form P9D is relevant. This distinction is important, as the treatment of some benefits can be different depending upon which form is applicable. In addition, employers do not pay Class 1A on P9D benefits. If the threshold were to be abolished, all benefits will have to be reported on a form P11D regardless of an employees earnings and this could lead to an increase in Class 1A National Insurance contributions payable by employers.  However, it will save employers having to distinguish between two types of employee when completing year end returns.

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SORP 2015 bite size guidance: Must, should and may…

Posted on: October 13th, 2014 by Sarah Case No Comments
Sarah Case, Director, Broomfield & Alexander

Sarah Case, Director, Broomfield & Alexander

Welcome to our series on SORP 2015 where the specialist charities and not for profit team at Broomfield & Alexander will bring you bite size guidance on the changes that SORP 2015 will bring to your organisation.

If you are implementing the FRS102 version of SORP 2015 (as a “large” charity or if you choose to opt for FRS102 anyway) you will need to get to grips with the following terms: -

  • THE MUSTS – these are the requirements that must be followed in order to comply with FRS102 SORP
  • THE SHOULDS – these recommendations should be followed in order to achieve best practice
  • THE MAYS – these are options or illustrations that may be adopted by the charity when preparing its accounts

Non compliance of a MUST is a departure from the requirements of FRS102 SORP.

Watch out for these words as you read through SORP2015 and ensure you fully understand the musts to ensure compliance.

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National Minimum Wage

Posted on: October 8th, 2014 by Sarah Curzon No Comments

There have been some significant changes regarding the National Minimum Wage, which will take place in October 2014.

You can download our employers summary of what is to come together with all the relevant information you might need to know here.

 

HMRC guidance updated on Gift Aid

Posted on: October 3rd, 2014 by Sarah Case No Comments

HMRC has updated its guidance for charities on Gift Aid for donations that attract a right of free admission to charity property.

The new guidance explains that the terms and conditions attached to a donation giving a right of admission to property cannot include a right to a full or partial refund of the admission payment.

This could include for example, a refund in the event of bad weather, cancellation of an exhibition or mechanical failure of an exhibit. A condition of the Gift Aid scheme is that any donation cannot be repaid under any circumstances.

Latest From The Blog


SORP 2015 bite size guidance: Income recognition

Sarah Case, Director, Broomfield & Alexander

Sarah Case, Director, Broomfield & Alexander

Welcome to our series on SORP 2015 where the specialist charities and not for profit team at Broomfield & Alexander will bring you bite size guidance on the changes that SORP 2015 will bring to your organisation.

In this series we’ve looked at a number of changes specific to SORP 2015 and we continue now with...

Read more

SORP 2015 bite size guidance: Trustees report – requirements

Sarah Case, Director, Broomfield & Alexander

Sarah Case, Director, Broomfield & Alexander

Welcome to our series on SORP 2015 where the specialist charities and not for profit team at Broomfield & Alexander will bring you bite size guidance on the changes that SORP 2015 will bring to your organisation.

We’ve already looked at the new terminology of SORP 2015 and the differences between FRS102 SORP and FRSSE SORP...

Read more