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Frequently asked questions
What qualifications should I look for in an accountant for my charity?
You should look for a professional who holds a recognised qualification from a body such as ACCA, ICAEW, or AAT. These qualifications ensure the accountant has undergone rigorous training and adheres to strict ethical standards. Additionally, you should confirm that the individual has specific experience with charity accounts and understands the Charities SORP framework.
How does an accountant help with Gift Aid claims to HMRC?
An accountant will ensure your Gift Aid declarations are correctly completed and stored, and that your records accurately reflect all eligible donations. They will calculate the correct amount to claim and submit the necessary paperwork to HMRC. This process maximises your charity's income and ensures you remain compliant with all relevant tax regulations.
What is the difference between an audit and an independent examination?
An independent examination is a lighter-touch review of a charity's accounts, suitable for smaller organisations below the audit threshold. An audit is a more detailed and formal process required for larger charities. A qualified accountant can advise on which procedure your charity is legally required to undertake based on its income and structure.
Can an accountant assist with Corporation Tax for my charity's trading subsidiary?
Yes, many charities operate trading subsidiaries to raise funds, and these are subject to Corporation Tax on their profits. An accountant with charity expertise can structure the subsidiary correctly and ensure that profits are transferred to the parent charity under Gift Aid to reduce the tax liability. This is a complex area that requires specialist planning.
What records must a charity maintain for HMRC compliance?
Charities must keep accurate financial records for at least six years, including details of all income and expenditure. You must also keep records of any Gift Aid declarations and maintain a separate record of restricted funds. An accountant can help you set up an appropriate bookkeeping system to ensure you meet all HMRC requirements.
How often should I review my charity's financial performance with my accountant?
It is advisable to meet with your accountant at least quarterly to review cash flow, budget forecasts, and any upcoming filing deadlines. Regular meetings allow for proactive planning and ensure that any financial issues are identified early. This ongoing relationship helps you manage restricted funds effectively and plan for future projects with confidence.
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