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Frequently asked questions
What qualifications should I look for in a charity accountant?
Look for an accountant who is a member of a recognised professional body such as ACCA, ICAEW, or AAT. These qualifications ensure the accountant has undergone rigorous training and adheres to strict ethical standards. For charity work, experience with the SORP and knowledge of Charity Commission requirements are equally important. Always verify their credentials and ask about their experience with organisations similar to yours.
How can a specialist charity accountant help with HMRC compliance?
A specialist charity accountant will ensure your organisation meets all HMRC obligations, including correct Gift Aid claims, VAT treatment, and PAYE for employees. They will also help you register for relevant taxes and submit accurate returns on time. Their expertise reduces the risk of penalties and helps you take advantage of all available reliefs, such as the charitable rate relief on business rates.
What is the difference between an independent examination and a full audit?
An independent examination is a lighter-touch review of a charity's accounts, suitable for smaller charities with an income below the audit threshold. A full audit provides greater assurance and is required for larger charities. A qualified accountant can advise which is appropriate for your organisation and carry out the work in accordance with relevant regulations, giving trustees confidence in the financial statements.
Can an accountant help with Corporation Tax for a charity's trading subsidiary?
Yes, many charities operate trading subsidiaries for non-charitable activities, and these are subject to Corporation Tax. An accountant with charity expertise will structure the subsidiary efficiently, ensure proper transfer of profits to the parent charity, and complete all necessary tax returns. They will also advise on exemptions and reliefs to minimise tax liabilities while remaining fully compliant with HMRC.
How often should a charity review its accounting arrangements?
It is wise to review your accounting arrangements at least once a year, ideally before the start of a new financial year. This allows you to assess whether your current accountant is meeting your needs and whether fees are competitive. Regular reviews also ensure that your accounting software and internal controls remain fit for purpose, especially as your charity grows or changes its activities.
What records must a charity keep for VAT purposes?
A charity must keep detailed records of all income and expenditure, including VAT invoices and receipts. If your charity is VAT-registered, you need to maintain a VAT account and complete VAT returns. A specialist accountant will help you set up proper record-keeping systems and identify which supplies are exempt, zero-rated, or subject to VAT, ensuring accurate reporting and maximum recovery of input tax.
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