Charity Update: Autumn 2020
This season’s bulletin covers the Charity Commission’s new online public register, updated Government Covid-19 guidance, the VAT implications for moving fundraising events online and the latest on the VAT position for charity social media advertising
Updated 10 November
What's new on 10 November:
The Charity Commission have updated their COVID-19 guidance as a result of the current lock-down. The guidance relates to holding charity meetings. See the relevant section below.
The Government’s COVID-19 guidance for the charity sector
The Government's guidance to charities affected by the pandemic has been updated for a couple of areas. For more detailed information on both, read here. The two areas are summarised below.
1. Updated sections about AGMs and holding meetings online.
The temporary provision allowing the postponement of AGMs was due to end on 30 September 2020. This end-date has now been removed. Also new sections have been added in relation to holding Charity meetings in England and Wales:
- In England, trustee and member meetings can still be held where necessary for providing voluntary or charitable services
- In Wales, trustee and member meetings should be held online or by telephone where possible, but where this is not possible they can be held in person where necessary for providing voluntary or charitable services.
2. Corporate Insolvency and Governance Act 2020
In the section covering the Corporate Insolvency and Governance Act 2020 the timeframe for holding meetings online has been extended from 30 September to 30 December 2020.
The Charity Commission's online public register of charities
The Charity Commission has launched a new online public register of charities. It increases the public information available about individual charities. Charities are encouraged to review their entry on the public register to see what potential donors are viewing.
For more information see here.
As traditional fundraising events have being cancelled due to COVID-19, charities have had to adapt quickly and develop new ways of fundraising. This has led to an increase in virtual events.
Some types of fundraising events are eligible for VAT exemption, but these are restricted to 15 events of the same kind in the financial year at any one location. HMRC regards a charity’s entire website as a location for events held over the internet. Charities should be aware that there may be VAT/tax implications if they are selling tickets or requesting a minimum donation for their fundraising events.
VAT position on charity social media advertising
In our update in February, we discussed the latest developments with the VAT position on charity social media advertising. Earlier in the year HMRC had indicated almost all types of social media advertising for charities should be standard rated, not zero rated - as is the case with most other charity advertising.
At the time, HMRC had argued that the selective nature of social media advertising (the ability to target individuals on certain demographics), maked it fall out of the scope of the zero-rate. The zero-rate requires ads to be available to the public. There were concerns in the Charity Sector that HMRC would seek to claim back unpaid VAT from the past 4 years.
Over the course of the year, HMRC has subsequently carried out a review of digital advertising and now accept that most forms of digital advertising can be zero rated. You can read their brief here.
The Brief contains full details and confirms that zero rating can apply to the following:
- Audience targeting
- Behavioural targeting
- Channel targeting
- Content targeting
- Daypart targeting
- Demographic targeting
- Device targeting
- Direct placements on third party websites
- Location targeting
- Lookalike targeting
- Pay-per-click adverts
Social media advertising or advertising on subscription websites remains, however, standard-rated. The confirmation will make this type of digital marketing more expensive for UK charities. Also HMRC intends to issue assessments against media companies who have omitted to charge VAT on these types of charity adverts for the last four years. If you or your agency would like advice in light of this development, contact one of our team
Despite the challenges being faced in the UK by the pandemic, Brexit remains firmly on the Government’s agenda. There’s very little time for organisations to prepare, particularly as the deal’s detail is still being finalised. In this overview, we’ve summarise what steps you can take now. Read it here.
Can we help?
If your Charity has questions or concerns relating to the latest guidance, please do get in touch with our specialist team. You’ll find their details on the right of this page.
Specific advice should be obtained before taking action, or refraining from taking action, in relation to this summary. If you would like advice or further information, please speak to your usual Shipleys contact.
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