There have been numerous positive developments within the charity sector over the past 12 months. We outline three developments in particular that will have a long-lasting positive impact on the charity sector.
VAT Compensation Refund Scheme
In the Budget 2018 speech, Ireland's Minister for Finance Paschal Donohoe announced the introduction of the VAT Compensation Refund Scheme, which took effect on 1 January 2018. This scheme will enable qualifying charities to claim back a proportion of the VAT paid on their inputs, based on the level of non-public funding that they receive. A total of €5 million is being made available for this scheme, which is a good first step. It is hoped that this amount will be increased over time and we look forward to seeing how the scheme develops over the coming years.
Publication of guidance by the Charities Regulatory Authority
The Charities Regulatory Authority (Authority) published three helpful guidance documents during 2017:
- Internal Financial Controls Guidelines for Charities: This guidance document describes best practice for internal financial controls and contains useful checklists for charity trustees to assist them in identifying weaknesses in their charity's internal financial controls.
- Guidance for Charity Trustees: This document sets out the role and obligations imposed on charity trustees by general charity law and by the Charities Act 2009.
- Guidelines for Charitable Organisations on Fundraising from the Public: This document sets out best practice fundraising guidelines for charities. It provides that fundraising should be underpinned by three core principles; (1) respect, (2) honesty and integrity and (3) transparency and accountability.
These documents contain helpful information and best practice guidance for charity trustees. Charity trustees should adopt a "comply or explain" approach in relation to these guidance documents.
Update of public register of charities
During the year, the Authority undertook a thorough review of the public register of charities and issued notices to all charities that were listed on the public register but that had not completed their registration and annual reporting obligations. This led to numerous charities bringing themselves into compliance with their obligations. It also led to the delisting of a number of charities from the public register. This is a positive step and has resulted in the establishment of a public register of charities that is current and more transparent for beneficiaries and members of the public.
Things to watch out for in 2018
It is likely that 2018 will also be a busy year for the sector, with new obligations relating to Statement of Recommended Practice (SORP) accounting and beneficial ownership registers due to be introduced during the year. This will supplement the existing annual reporting and compliance obligations already being met by charities. Charity trustees should also remain cognisant of the statutory obligation to report to the Authority any reasonable grounds for belief that a theft/fraud offence has been or is being committed.
During the course of the year, we will run tailored governance clinics for charity trustees to provide them with essential information in relation to good governance.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.