Remember That You May Need to Report any Financial Difficulties and Losses as a Serious Incident
The Charity Commission has issued new guidance designed to help with running your charity during the Covid19 outbreak.
This guidance includes:
- Government financial support for charities
- AGMs and other meetings: postponing or cancelling meetings
- Holding meetings online or by telephone
- Using reserves and restricted funds
- Insolvency help for charitable companies and charitable incorporated organisations
- Further advice on managing financial difficulties
- Charity objects: understand if you can help with coronavirus efforts
- Reporting serious incidents to the Charity Commission
- Keeping people safe
- Fundraising and coronavirus appeals
- Reducing or returning contractual fees in return for a modified service
- Working with a company or business to help with coronavirus
- Charity statement of recommended practice (SORP) guidance
- Information from other organisations
Reporting financial difficulties as a serious incident
In particular, this guidance includes details of what to do if you’re experiencing financial difficulties, which may include reporting these difficulties and losses as a ‘serious incident’. You can do this via a simple online form, and it is the responsibility of trustees to decide what needs reporting and make sure that it’s done. The Charity Commission has relaxed the rules on this. You normally have to declare any losses of £25,000 or 20% of the charity’s income, however, they want trustees to focus on the impact of the losses rather than the amount.
Temporary changes to insolvency rules
The Government has also temporarily relaxed the insolvency rules by suspending the wrongful trading law which normally forces organisations to file for bankruptcy if it cannot meet all its debts. This is to protect directors and trustees and allow them time to restructure or find a rescue package or other funding, and hopefully allow them to emerge intact from the pandemic.
And don’t forget, if you are struggling and need help and advice you can talk to our expert team at TSL Kirklees or contact our accounting and finance partners, WYCAS for free advice.
