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Frequently asked questions
What should a charity look for when choosing an accountant?
When selecting an accountant for a charity, it is essential to find someone with experience in the sector, ideally with knowledge of SORP and Charity Commission requirements. Look for qualifications from ACCA, ICAEW, or AAT, and check that the professional is regulated and insured. A good charity accountant will understand restricted funds, Gift Aid, and independent examinations, and will offer proactive advice on tax and compliance matters.
How does an accountant help with HMRC compliance for a charity?
An accountant assists with HMRC compliance by preparing accurate tax returns, managing Gift Aid claims, and ensuring that VAT is handled correctly, including partial exemption calculations if applicable. They also help with payroll and any Corporation Tax liabilities on trading income. Their expertise ensures that your charity meets all filing deadlines and avoids penalties, whilst maximising available tax reliefs.
What is the difference between an independent examination and an audit?
An independent examination is a lighter-touch review of a charity’s accounts, suitable for smaller charities with income below the audit threshold. An audit is a more thorough assessment required for larger charities, providing greater assurance to stakeholders. A qualified accountant can determine which applies to your organisation and carry out the necessary work in line with current regulations and best practise.
Can an accountant help with Gift Aid and other tax reliefs?
Yes, an accountant can ensure your charity claims Gift Aid correctly on eligible donations, keeping proper records and declarations. They can also advise on other reliefs such as the Charities Aid Foundation (CAF) and tax-efficient giving structures. By optimising your claims, an accountant helps maximise the income your charity receives from every donation, which is vital for your financial sustainability.
How often should a charity review its financial arrangements with an accountant?
It is wise to review your financial arrangements at least annually, ideally before your year-end to plan for tax and reporting deadlines. However, regular contact throughout the year can be beneficial, especially if your charity experiences changes income, staffing, or activities. An accountant can provide ongoing support, helping you adapt to new regulations and make informed decisions as your organisation evolves.
What qualifications should a charity accountant hold?
A charity accountant should ideally hold a recognised qualification from a professional body such as ACCA, ICAEW, or AAT. These qualifications demonstrate a high level of technical knowledge and ethical standards. Additionally, experience in the charity sector is crucial, as it ensures familiarity with SORP, independent examinations, and Charity Commission guidance. Always verify that the accountant is regulated and holds appropriate professional indemnity insurance.
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