Whilst an appreciation that VAT at the zero-rate is applicable to various goods and services provided to the not-for-profit sector, it is also important to remember the supplies made by this sector can also benefit from the zero-rate.

This is a summary guide of the main VAT reliefs available to the sector in terms of supplies made by non-profit organisations and those services and goods received. These reliefs will all be subject to criteria and in some case require the provision of a VAT Certificate or an Eligibility Statement.

Below is a summary of the main VAT reliefs available to non-profit organisations:

Zero-rated supplies made charities and not-for-profit organisations

• Sale of donated goods
• Supplies of advertising in brochures and literature for other charities
• Certain passenger transport
• Apportioned elements of membership subscriptions
• Certain apportioned elements of patron and supporter payments.

Zero-rated supplies to charities

• Advertising and goods connected with collecting donations
• Supplies of goods and services which the charity makes available to disabled people
• The first grant of a major interest (freehold or lease exceeding 21 years) in a building or part of a building intended to be used solely (95% or more) for a relevant charitable purpose
• The construction of a building or part of a building and annex intended to be used solely (95% or more) for a relevant charitable purpose
• The purchase of substances directly used for testing, or for mixing with other substances when the charity is engaged in medical or veterinary research
• The installation of energy saving materials
• Equipment for producing ‘talking books’ and newspapers
• Lifeboats, and associated equipment including repair and maintenance
• Certain medical and scientific equipment
• Certain medicinal products to be used in the treatment and care of people or animals
• Certain rescue equipment
• Certain specialist communication, light enhancing, and heat detection equipment when purchased by charities supplying first aid and rescue
• Certain resuscitation training models used in first aid training

The above is a guide and any non-profit making organisation should seek expert VAT advice to ensure VAT costs are minimised whilst VAT recovery in maximised.

Please contact a member of the taylorcocks charity team to discuss how you can minimise the amount of VAT and other taxes incurred.

What is the benefit?

It is hoped that giving will now be more spontaneous and more effective and 100% of all money donated will go to charity with no charges or commissions having to be paid from the sums collected.

The scheme works with any mobile network and with 50 million people owning a mobile phone there is huge potential for charities to raise additional money.

How can you become a charity member?

To register with the scheme charities have to contact Vodafone, free of charge, and pick a unique text code for their organisation. Once they have publicised their unique code to the public, donors will then simply text the code and the amount of their donation to 70070. They will then be sent a gift aid text allowing the charities to reclaim tax on the donation, boosting its value.

Spreading the word

With national TV advertising highlighting the service to consumers and charities alike, it acknowledges the importance of mobile phones in everyday life and is a reflection of how the sector can respond to society for its own benefit.

JustTextGiving also offers the service to individual fundraisers, for example, running the London Marathon, who can obtain their own short code to give to friends, family and colleagues to make it easy for them to raise funds for their chosen charity.

>> For more information on this scheme please contact our charity team or go directly to the website www.JustTextGiving.co.uk

Anti-cuts website False Economy said thousands of charities were likely to suffer, including those providing “vital services” for elderly or vulnerable people.

The group’s study of local councils indicates that some charities will have their funding axed altogether.

More than £10m in cuts have been made during the last 12 months, but False Economy estimates that the final figure will rise much higher once authorities have finalised their plans.

Campaign director Clifford Singer said the cuts would go deep into the voluntary and community sectors – affecting groups which help disabled people, children, the elderly and vulnerable adults.

Mr Singer said: “These are not just nice to have groups but organisations providing vital services for older people trying to maintain independent lives, vulnerable children and abused women.

“With so many of the cuts simply resulting in further pressure on the NHS or other statutory services, they are truly a false economy.”

The coalition Government is using the Finance Act 2011 to make the following changes to state pensions.

• Introducing a new flat rate single old age pension of £140pw
• The default retirement age has been abolished
• Stopping contracting out contributions from 2012
• Abolishing pension credit
• Extending the state pension age to 66 for both men and women by 2020, rising to 67 in 2036 and then 68 in 2046

Private pensions are now becoming compulsory increasing the responsibility on the employer to provide adequate pensions provisions for their employees.

How will this affect you?

As an employer it is now your responsibility to enrol all employees into the default state sponsored scheme called the National Employment Savings Trust (NEST) or enrol them into your own pension scheme which must be a qualifying workplace pension scheme (QWPS), the final regulations of which are yet to be released.

Who is eligible?

• Anyone aged 22 or over and below the state pension age
• Employed for 3 months or more and expected to work for more than 3 months
• Anyone earning over the personal allowance

You as the employer must then allow those not eligible for auto enrolment to opt in if they wish.

How much will it cost?

The statutory contribution to NEST is 8% of total earnings between the lower and higher NI thresholds which are £5,172 and £38,175, with a minimum of 3% from the employer. With QWPS the employer can define pensionable pay and contributions could vary between 7% and 9%.

Contributions will start to be phased in from 2012 to 2017, starting at 1% from the employer and 1% from the employee. Eventually employees will have to find 4% themselves which may persuade them to opt out of the scheme. To do this they will have to opt out independenlty without any help from the employer and within the first month of enrolment to avoid leaving any money in the ‘pot’, however the employer will then have to re-auto- enrol them 3 days later.

When will it affect you?

These changes will not affect all businesses at the same time, unless you hear otherwise from the pensions regulator the changes will need to be implemented on your designated staging date, which depends on the number of people you employ.

The largest employers will have until October 2012 to prepare for these changes and the smallest until September 2016.

How can taylorcocks help?

We will help you to understand how the changes will affect you legally and financially. We will then help you to prepare for the reforms ahead and overcome any adverse effects these changes will have on your Charity.

This can include:

• Identifying and planning any changes to existing arrangements in order to meet QWPS criteria.
• Identifying and helping to plan changes to procedures to install auto-enrolment
• Payroll issues
• Assisting with member communication issues including provision of materials and staff presentations

If you would like to discuss how these pension changes are going to affect you or for more information please do not hesitate to contact a member of staff on 0370 770 8111.