Archives for October 2011

Thank you to everyone who came to the Expo.

Charities only need to account for VAT on those parts of its activities that are within the scope of VAT. A quick checklist follows:

• Sale of donated goods from a charity shop – zero rated supply
• Investment income, bank interest etc – outside the scope of VAT
• Donations from general public – outside the scope of VAT
• Fundraising events – exempt from VAT
• Grants, see below

The VAT status of the charity shops is advantageous. Even if the zero rated sales are below the current registration limit of £73,000, it would be worthwhile registering the trade voluntarily as any associated costs that include VAT can be reclaimed.

Grants received

Although most grants received by a charity are outside the scope of VAT, occasionally grant providers will require the charity to provide services to individuals or groups as a direct condition of grants made. If this is the case the grant is a standard rated transaction. In most cases this will not cause difficulties as most grant providers are Local Authorities that are VAT registered and can claim back any VAT charged.

Nevertheless charities should take care to seek advice and ensure that they charge VAT on grant income when appropriate.

The Pensions Regulator has published information about proposed workplace pension changes that are due to be phased in from next year.

Workers who will need to enrol in the new workplace pension arrangements are:

• Employees who earn more than the minimum earnings threshold, and
• Are aged between 22 and state pension age, and
• Work in the UK.

Each employer will be given a date from which changes will have to be in place. This will be known as your staging date. Larger employers will have the earliest staging dates. The process will begin October 2012 and continues through to 2016.

Readers may find the following notes useful:

• Find out what your likely staging date will be at www.tpr.gov.uk/staging
• You will be required to contribute at least 3% of worker’s earnings.
• Workers will be required to make a contribution such that the minimum, combined contribution is 8%.
• Workers will qualify for tax relief on their contributions.
• Existing pension arrangements may qualify; you will need to check with your pensions advisor.

More general information on the changes is available at www.dwp.gov.uk/policy/pensions-reform