A guide to third sector trading - WCVA

More documents

Recommendations

Info

It’s an idea, but is it business? A guide to third sector trading 1: Getting started 2: First steps 3: Business planning 4: Legal and governance 5: Funding and resourcing 6: Financial controls 7: Managing growth 8: Management and governance 9: Social enterprise 10: Sources of support • Charitable rate relief: Rate relief can be a significant benefit for small and marginal enterprises, but it is doubtful whether this alone justifies charity registration. (See Section 7.5.) − Local authorities are required by law to grant charities 80% relief on their business rates, and have the discretion to grant relief on the remaining 20% so that no rates are paid. Many charities benefit from 100% relief, and if this is not automatic in your area you should still make a case for it to your council. − Premises, such as charity shops, whose sole income comes from selling donated goods also enjoy the mandatory 80% relief. The same benefit applies where the majority of income is from the sale of goods even if a shop sells both donated and purchased items. − Some local authorities have also been persuaded to grant rate relief on the premises of third sector trading organisations even though they are not selling donated goods. It is worth making the case to your local authority. − Subsidiary trading companies which share premises with their parent charity can also share the rate relief. But you should check the situation with the local authority. • Relief from Stamp Duty: Exemption from stamp duty applies to any conveyance, transfer or letter to a charity – a small point to bear in mind when acquiring property. • Tax relief on private donations: Gift Aid arrangements can be a real benefit to charities – see section 7.7. • VAT: There are very marginal VAT benefits (for a few specific types of trading) See Section 7.5. • Public image: Being registered as a charity demonstrates that the organisation is a charity in law and therefore subject to the Charity Commission’s jurisdiction. This may help to create the image of a reputable body. But not everyone will be impressed, so this depends who you are dealing with. • Standards of behaviour: Through its regulations and its recommendations, the Charity Commission lays down standards of good practice in operating public organisations, which should, arguably, apply to any company which uses public money or depends on the public for support. (This does not mean, of course, that your company needs to be a registered charity in order to have high standards, but it can help to keep you on track.) 92
It’s an idea, but is it business? A guide to third sector trading 1: Getting started 2: First steps 3: Business planning 4: Legal and governance 5: Funding and resourcing 6: Financial controls 7: Managing growth 8: Management and governance 9: Social enterprise 10: Sources of support • Funding: A minority of trusts and donors have a policy of giving grants only to charities. Whether this is a significant factor for you will depend on: − whether you are undertaking charitable, social, community or environmental activities as well as, or as part of, your trading − the scale and nature of your business activities (don’t expect charity funders to invest in a venture which is exclusively about generating income) − whether it is mainly grant or loan funding which you need − who you apply to for grants. Disadvantages for trading organisations: • Charity regulations: Charities must comply with charity legislation, which is seen by some people as interfering with the freedom of businesses to operate effectively. It imposes, for example, severe controls on some pretty fundamental aspects of company activity: − who can benefit from your work − who can be a trustee/director (which can limit your power to appoint employees or their relations to the board) − the way staff appointments of former trustees are made − the way accounts are kept in larger organisations − what you can spend the businesses’ money on (charities can only use their resources to achieve their charitable objectives). • Charity Commission ‘interference’: Charities are subject to the jurisdiction of the Charity Commission, who can institute formal enquiries in cases of suspected misconduct or mismanagement and who have wide powers, including the removal and replacement of trustees. This can result in time-consuming and distracting investigations if your charity becomes the victim of whistle blowers, whether they are well-intentioned or malicious (though in practice, most charities never encounter such a situation). • Double reporting: A company limited by guarantee which becomes a registered charity has to send annual returns and annual reports to both Companies House and the Charity Commission. This obligation is relieved by the new Charity Incorporated Organisation structure. • VAT: You will be in a tiny minority if you receive any VAT benefits from your charitable status. 93
Page 1 and 2:
It’s an idea, but is it business?
Page 3 and 4:
Page 5 and 6:
Page 7 and 8:
Page 9 and 10:
Page 11 and 12:
Page 13 and 14:
Page 15 and 16:
Page 17 and 18:
Page 19 and 20:
Page 21 and 22:
Page 23 and 24:
Page 25 and 26:
Page 27 and 28:
Page 29 and 30:
Page 31 and 32:
Page 33 and 34:
Page 35 and 36:
Page 37 and 38:
Page 39 and 40:
Page 41 and 42:
Page 43 and 44: It’s an idea, but is it business?
Page 93: It’s an idea, but is it business?
Page 145 and 146:
Page 147 and 148:
Page 149 and 150:
Page 151 and 152:
Page 153 and 154:
Page 155 and 156:
Page 157 and 158:
Page 159 and 160:
Page 161 and 162:
Page 163 and 164:
Page 165 and 166:
Page 167 and 168:
Page 169 and 170:
Page 171 and 172:
Page 173 and 174:
Page 175 and 176:
Page 177 and 178:
Page 179 and 180:
Page 181 and 182:
Page 183 and 184:
Page 185 and 186:
Page 187 and 188:
Page 189 and 190:
Page 191 and 192:
Page 193 and 194:
Page 195 and 196:
Page 197 and 198:
Page 199 and 200:
Page 201 and 202:
Page 203 and 204:
Page 205 and 206:
Page 207 and 208:
Page 209 and 210:
Page 211 and 212:
Page 213 and 214:
Page 215 and 216:
Page 217 and 218:
Page 219 and 220:
Page 221 and 222:
Page 223 and 224:
Page 225 and 226:
Page 227 and 228:
Page 229 and 230:
Page 231 and 232:
Page 233 and 234:
Page 235 and 236:
Page 237 and 238:
Page 239 and 240:
Page 241 and 242:
Page 243 and 244:
Page 245 and 246:
Page 247 and 248:
Page 249 and 250:
Page 251 and 252:
Page 253 and 254:
Page 255 and 256:
Page 257 and 258:
Page 259 and 260:
Page 261:
show all

A guide to third sector trading - WCVA

Create successful ePaper yourself

Delete template?

Save as template?