Covid-19-Charities Archives - Grunberg & Co

Charities lose £3.6 million to fraud during pandemic

admin — Tue, 20 Oct 2020 16:43:48 +0000

More than 645 charities have become a victim of fraud during the coronavirus pandemic, a major study has revealed.
The figures were published by the Charity Commission for England and Wales during Charity Fraud Awareness Week – the annual event designed to help not-for-profits strengthen their defences against crime and fraud.
According to the report, hundreds of criminal attacks against charities have cost the sector some £3.6 million in losses since the start of the pandemic in March.
However, the “true scale of fraud against charities is believed to be much higher, as fraud is known to be underreported”, said the Charity Commission.
So, why is charity fraud increasing?
The regulator believes that remote working, and the resulting virtual activities and sign-off processes, is enabling an environment beneficial to criminals.
Fraudsters may also be extorting charities’ “tendencies to place goodwill and trust in individuals”. The Charity Commission highlights one example where a criminal used a story of “personal struggle” and financial hardship to pressure a charity into making a payment without carrying out the usual checks.
Fraud can be defended against with the correct financial controls, however. According to the regulator, two thirds of frauds are picked up by financial controls or audits, meaning simple checks and controls, together with a strong counter-fraud culture, can be “key to disarming fraudsters”.
Speaking at the 2020 Charity Fraud Awareness event, Helen Stephenson, Chief Executive of the Charity Commission, said: “We are seeing evidence that opportunists may be taking advantage of charities during the pandemic and I urge all charities to be extra vigilant against fraud.
“This comes at a time when charities are a lifeline for many people suffering from Covid-19, and the wider impacts of the pandemic – charities have been at the forefront of responding to the crisis, and many have also been placed under severe financial strain. As our country faces another challenging point in the crisis, we cannot afford for charitable work to be disrupted by criminals.
“When fraud hits charities, its impact is felt far beyond the balance sheet – it is people that are let down, often hard-working volunteers or people in desperate need. That’s why I’m urging all trustees to take action now, to protect their charity’s valuable funds and assets.”
For support and advice strengthening your financial controls, please get in touch with our expert team today.

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Coronavirus Business Interruption Loan Scheme expanded to businesses “in difficulty”

admin — Thu, 30 Jul 2020 16:34:12 +0000

More small businesses can now benefit from Government-backed finance after the Coronavirus Business Interruption Loan Scheme (CBILS) was expanded to firms “in difficulty”.
The change comes as official figures revealed that the scheme has now been used over 57,000 times, delivering £12.6 billion in affordable finance.
Under previous rules, businesses classed as “undertakings in difficulty” could not access the CBILS due to EU State Aid rules.
Businesses defined as being “in difficulty” usually find it hard to source finance because they are considered high-risk with “high levels of debt and accumulated losses”.
However, changes today ensure that any business in this category with fewer than 50 employees and a turnover of less than £9 million can apply for a CBILS loan, providing they are not insolvent and are capable of being rescued.
The new rules will align the CBILS with the Bounce Back Loans (BBL) scheme, which already allows businesses in difficulty to access finance.
Welcoming the changes, Chris Wilford, Head of Financial Services Policy at the Confederation of British Industry (CBI) said: “This is an important step that will help more businesses get the critical support they need. These eligibility hurdles have been a real stumbling block for many firms across the UK throughout the crisis. These were put in place to avoid governments bailing out failing companies, but those rules were established in normal times.
“They have had a real impact on the ability of some high-growth firms and those with more complex structures being able to access the loan schemes. More jobs and livelihoods will be now be saved. The CBI will continue to work with government on further measures for firms of all sizes.”

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HMRC updates tax guidance for waiving income and bonuses and charitable giving

admin — Tue, 02 Jun 2020 14:30:56 +0000

HM Revenue & Customs (HMRC) has updated its guidance for people choosing to waive their income to support their business or a charity during the COVID-19 pandemic.
The move comes after research revealed that an increasing number of people were choosing to give up all or part of their income despite not understanding the tax implications.
What are the rules?
Employers, directors and employees have the right to waive their salary or bonuses, known as a “waiver of remuneration”.
In these situations, no Income Tax or National Insurance Contributions (NICs) will be due on the amount given up, providing it is not part of any wider arrangement to deliver the amount to a recipient or cause. For example, waived income would not attract liabilities if it was sacrificed to boost cash flow. But it would attract tax if it was waived on the condition that the sum would be donated to a particular charity.
It is also possible to return salary or bonuses after they have been paid. However, it is not possible to claim back Income Tax and NICs that have been deducted.
What about dividends?
Waiving dividends, meanwhile, requires a Deed of Waiver to be formally executed, dated and signed by shareholders and witnessed and returned to the company.
On dividends, the guidance states: “The waiver must be in place before the right to receive a dividend arises. For final dividends, this is before they are formally declared and approved by the shareholders. For interim dividends, the waiver must be in place before the dividends are paid.”
Employers, directors and employees can also choose to donate to charity under the Payroll Giving and Gift Aid scheme.
For help and advice, contact our expert team today.

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Government pledges £750 million to charities

admin — Wed, 15 Apr 2020 09:44:49 +0000

The Chancellor, Rishi Sunak, has announced a package of funding worth £750 million to help the country’s charities, many of whom have seen a significant shortfall in fundraising and other income as a result of the Coronavirus pandemic.
He praised the 170,000 charities across the UK who were helping communities with the impact of COVID-19, but recognised that the Government will not “be able to match every pound of funding they would have received this year”.
However, he did pledge £370 million of funding to go to smaller charities, the “unsung heroes” in many villages, towns and cities, including some through a grant to the National Lottery Community Fund.
Government departments will also be given powers to allocate a further £360 million to charities “providing essential services and supporting vulnerable people”, including £200 million of dedicated funding for hospices.
Rishi Sunak also confirmed that the BBC would be holding a special fundraising event, the Big Night In, which is due to be held in partnership with the National Emergencies Trust.
During this event, the Government has promised to match the public’s donations “pound for pound”, with a minimum pledge of £20 million.
The Chancellor also re-iterated that charities could make use of existing support schemes, including the Coronavirus Job Retention Scheme, to support workers who need to be furloughed.
It is not yet fully clear how this new funding will be delivered by the Government, but we intend to keep you updated as more details are announced.

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