Accountants for Charities
Accountants for UK charities, CIOs and community organisations, covering the Charities SORP, Gift Aid and restricted funds.
How we help
Charity accounting follows its own framework, answers to a different regulator, and is read by funders and trustees rather than shareholders. It is a specialism, and generic company accounting does not transfer cleanly.
The Charities SORP and which framework applies
Charity accounts follow the Charities SORP, which requires a statement of financial activities rather than a conventional profit and loss, and fund accounting throughout. Which reporting and scrutiny requirements apply, receipts and payments or accruals, independent examination or audit, depends on your income and structure. Our guide to charity accounting basics and the three legal forms explains the framework.
Restricted funds are the part people get wrong
Money given for a specific purpose is restricted and cannot be spent on anything else, even to cover core costs in a difficult month. Tracking restricted, unrestricted and designated funds separately is a legal requirement and the thing trustees are most often unclear about. Getting it wrong risks breach of trust, not merely a presentational error.
Gift Aid, claimed in full
Gift Aid adds 25p to every eligible pound donated, and a great deal goes unclaimed because declarations are missing or records will not support a claim. The Small Donations Scheme allows a top-up on small cash and contactless donations without declarations, which suits collections and events. Both need records that would survive an HMRC check. See charity tax in practice.
Trading, VAT and where charities lose money
Charities are not automatically exempt from VAT, and the interaction between exempt activities, zero-rated reliefs and non-business income makes recovery genuinely complicated, frequently making a charity partly exempt. Significant non-primary-purpose trading may also need a subsidiary to avoid a tax charge.
CIOs and sports clubs
The CIO gives limited liability without Companies House registration, and is now the default for new charities, though it has first-year obligations that catch trustees out, see setting up a CIO. Sports clubs should also consider CASC status, which is frequently overlooked.
What we do for charities
SORP-compliant accounts and trustees' reports, fund accounting, Gift Aid claims, independent examination support, and payroll for charity staff.
Frequently asked questions
Does my charity need an audit?
It depends on income and assets. Many smaller charities need only an independent examination, which is less onerous. We confirm which applies and can support either.
What are restricted funds?
Donations given for a specific purpose, which cannot lawfully be spent on anything else. They must be tracked separately from unrestricted funds, and getting this wrong is a breach of trust rather than a presentational issue.
How much is Gift Aid worth?
Twenty-five pence for every eligible pound donated. A great deal goes unclaimed because declarations are missing or records will not support a claim.
What is the Small Donations Scheme?
It allows a Gift Aid-style top-up on small cash and contactless donations without individual declarations, which suits collections, events and buckets.
Should we set up a CIO or a charitable company?
A CIO gives limited liability without Companies House registration and is now the usual choice for new charities, though it carries first-year obligations trustees often miss.
Do charities pay VAT?
Often yes. Charities are not automatically exempt, and the mix of exempt, zero-rated and non-business income frequently makes a charity partly exempt, which limits recovery.
Looking for charities specialists?
Book a free consultation and we will tell you honestly whether we can improve on what you have.