Charities and the Not-For-Profit Sector by li5899


									Charities and the Not-For-Profit Sector

Introduction                                                         Start-up Services

The charity world has seen huge change in the last couple of         A charity may wish to make use of a trading subsidiary if it is
years, both in accounting issues by the introduction of the          to undertake commercial as well as charitable activities. We
SORP 2005 and in law, through the introduction of the                are able to advise on the structure of such arrangements and
Charities Act 2006 (not helped by the fact this has been             help with the process of incorporating any additional
brought in through four different orders). It is little wonder       companies.
that charity trustees may be feeling overwhelmed by the
changes and in need of guidance and clarity.                         Clubs and Associations

Mercer & Hole is well placed to offer the reassurance and            We act for a number of clubs and trade associations that
advice needed during this time of change. We currently act           although do not have charitable status, have received certain
for some 50 charities of various sizes with assets up to £58m.       exemptions from HMRC.
These clients come from a range of sectors, including:
                                                                     Our services in this area include:
•   The arts                     •   Religious institutions
                                                                     •   Accounts preparation             • Audit
•   Social welfare               •   Education
                                                                     •   Specialist taxation advice
•   Independent schools          •   Grant making trusts
                                                                     Pension Schemes
We offer a range of services that reflect the needs of these
varying organisations.                                               The audit of occupational pension schemes is a very specialist
                                                                     area. The Pensions Act 2005 and subsequent statutory
Our services                                                         legislation is complex and wide-ranging with Pension
                                                                     Trustees facing civil and even criminal penalties for breaching
External Audit                                                       their duties.

A charity may require an external audit due to its size or           Trustees require auditors who are experienced and
because its trust deed dictates that it must have one. We aim        knowledgeable in this sector. Our specialists in this area have
to provide an efficient and cost effective audit carried out by      many years experience, all staff from junior to manager level
knowledgeable staff. We can offer an audit team that have            undertake specific and regular training in this area.
undertaken specialist charity training to ensure that the staff
have a good understanding of the relevant charity rules and          We act for over 30 pension schemes with assets up to £260m.
regulations, and are best placed to understand the
importance of these rules to our clients.                            We can offer the following services in a cost effective manner:

Independent Examination                                              •   Accounts preparation             • Audit

If a charity is exempt from audit it may still require an            •   Tax compliance                   • Guidance to pension
Independent Examination. Our specialist staff include                                                       scheme trustees
members of the Association of Charity Independent
Examiners and are able to advise clients of their need for an
independent examination and undertake the examination in
an efficient and timely manner.

Accountancy Services

In addition to charity audits, we can also assist charities with a
range of accounting functions, including the production of
year end accounts, setting up accounting systems and
advising on suitable accountancy computer software.
Mercer & Hole Trustees Limited

We have one of the largest Trustee departments outside of
London. Our work in this area has now expanded to such an
extent that we have set up a specialist trust company, Mercer
& Hole Trustees Limited, with responsibility for over 500
trusts, ranging in size from under £100,000 to many millions
of pounds. This includes working with charitable trusts to
ensure that they comply with the most recent regulatory

Our clients receive assistance in two key areas:

•   Financial planning, involving the strategic use of trusts          Financial Services

•   Running and administration of trusts, including                    In April 2008, we acquired the established Financial Services
    preparation of tax returns, accounts and acting as                 firm of Nightingale Associates. M&H LLP retaining the name
    trustee.                                                           Nightingale Associates are Independent Financial Advisers
                                                                       Our enhanced services provide comprehensive, impartial
Trustees may be accountable if a loss is incurred as a result of       advice tailor made to each individual client's circumstances.
failure. Good Governance in charities is essential to ensure           Our investment recommendations are made after careful
the confidence of key stakeholders.                                    research taking into account our client's objectives, charges,
                                                                       timescale and attitude to risk. We are also able to review
Our specialist staff are able to advise trustees on how to run         clients' existing investments to ascertain if they are still suited
an effective board, review current systems and suggest                 to their requirements.
improvements to internal controls and improve risk
management.                                                            Insolvency

It helps ensure that an organisation is forward thinking,              It is an unfortunate fact that in the current financial climate,
trustees are knowledgeable about their duties, and the                 some charities may face financial difficulties which may
organisation is effective and properly run.                            threaten the continuation of the organisation.

VAT                                                                    We have a dedicated team of Licensed Insolvency Practitioners
                                                                       and Turnaround and Rescue Specialists with wide experience
VAT, if it applies to a charity, can be very complicated               in helping distressed organisations return to good financial
especially where the partial exemption rules apply. Our VAT            health and profitability.
experts are available to help not only with advice on VAT
rules and regulations and how they apply to individual
organisations but also with VAT registration, review of VAT
calculations and assisting with HMRC investigations.


We are well equipped to provide specialist advise on:

• Application for charitable status with the Inland Revenue

• Corporate tax issues relating to trading subsidiaries and gift aid

• Routine advice on PAYE and National Insurance for those
  charities running a payroll system.

   Charities and the Not-For-Profit Sector

    Our Team

    At Mercer & Hole considerable importance is placed on staff
    continuity, as we believe it is important to build on the
    knowledge of a client year on year. Each new client is
    introduced to a lead partner who remains the main contact as
    the relationship develops, acting as an adviser, ensuring
    continuity of knowledge, attending all key meetings and being
    available by phone or face-to-face as required. We also
    introduce a team who work closely with the partner and
    understand our approach to service.

    All our staff working on specialist clients attend regular training
    courses to ensure their knowledge is completely up to date.

    We have two charity specialists who have obtained the
    Diploma in Charity Accounting issued by the Institute of                                               This ICAEW Diploma acknowledges expertise and experience in
    Chartered Accountants in England and Wales.                                                            charity accounting and finance.

    About Mercer & Hole
    Founded in 1905, Mercer & Hole is a top 50 firm of Chartered                                           Mercer & Hole is a founder member of TIAG an international
    Accountants, with 20 partners and around 170 staff. The firm                                           network of accountants through which we can link our clients
    specialises in providing services to both businesses and private                                       who require accountancy assistance abroad, with our partner
    clients and operates from offices in St Albans, London, Milton                                         firms.
    Keynes and Northampton. Our philosophy is to provide a
    personal partner-led service with a high level of technical                                            As part of our commitment to provide international services to
                                                                                                           UK companies and foreign organisations, Mercer & Hole has
                                                                                                           registered under the US’s Public Company Accounting
    As a firm, we provide audit, accountancy and taxation services
                                                                                                           Oversight Board (PCAOB).
    to our clients and expertise in a wide range of niche services
    including business development, rescue recovery and
                                                                                                           As a result of this registration Mercer & Hole can now act not
    insolvency, financial services, outsourcing and trust advice and
                                                                                                           only for subsidiaries of private US companies but also for
                                                                                                           subsidiaries of listed US companies, even when the UK
                                                                                                           company is a ‘substantial’ part of the group.
    Mercer & Hole has a broad client base including individuals,
    families, start-up firms, small to medium sized businesses and
    UK divisions of multi-national enterprises.

If you would like to discuss our charities and the not-for-profit sector services further, please contact your local partner below.

   Paul Webster                                     Andy Crook                                                 Gary Farnes                                            Mike Reed
   Joint Managing Partner                           General Practice Partner                                   General Practice Partner                               General Practice Partner
   Email:              Email:                          Email:                     Email:
   Tel: (01727) 869141                              Tel: (020) 7353 1597                                       Tel: (01908) 605552                                    Tel: (01604) 669330
   Gloucester House, 72 London Road                 The International Press Centre                             Silbury Court,                                         300 Pavilion Drive
   St. Albans                                       76 Shoe Lane                                               420 Silbury Boulevard,                                 Northampton Business Park
   Hertfordshire AL1 1NS                            London EC4A 3JB                                            Central Milton Keynes MK9 2AF                          Northampton NN4 7YE


                                       Mercer & Hole is registered by the Institute of Chartered Accountants In England & Wales to carry out company audit work.

                                    Financial Services provided by M&H LLP trading as Nightingale Associates. Nightingale Associates is authorised and regulated by
                                                                                      the Financial Services Authority.

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