Qualifying Earnings Pension Schemes

Image result for pensions schemesEvery year, the Department for Work and Pensions (DWP) reviews the earnings thresholds for automatic enrolment pensions. The changes take effect from the start of the next tax year following the changes on 6 April

If you’re using qualifying earnings, you’ll contribute a percentage of your worker’s gross annual earnings that fall between £6,136 and £50,000. The first £6,136 of their earnings isn’t included in the calculation. For example, if a worker earns £20,000 their qualifying earnings would be £13,864.  This means that qualifying earnings can’t be more than £43,864 (£50,000 minus £6,136) for the 2019/20 tax year

Earnings thresholds for 2019-20

Pay reference period
2019 – 2020 Annual 1 week Fortnight 4 weeks  1 month  1 quarter Bi-annual 
Lower level of qualifying earnings £6,136  £118  £236  £472  £512  £1,534  £3,068
Earnings trigger for automatic enrolment £10,000  £192  £384  £768  £833  £2,499  £4,998
Upper level of qualifying earnings £50,000  £962  £1,924  £3,847  £4,167  £12,500  £25,000

More information can be found here

Pension Wise

Image result for pension wise hm governmentPension wise is a free and impartial government service that helps you understand the options for your pension pot.

Who?

Pension Wise can help if you:

  • are aged 50 or over
  • have a personal or workplace pension
  • want to make sense of your options

What?

What is a Pension Wise appointment?

  • Specialist pension guidance
  • 45 to 60 minutes
  • Over the phone or local to you

How?

How to book an appointment?

More information can be found here

Debtor, Creditor, Accrual, Prepayment

Debtors and CreditorsSometimes it is difficult to know how to account for transaction invoices that have been issued and not paid by the end of the financial year, either to your organisation or from your suppliers.

Your accounts are not based on the money that was actually paid or received in the financial year, they are based on what should have been paid or received.  

The following definitions may help you as you prepare your accounts for the Independent Examiner.

Debtors – A debtor is one party who owes money to another – for example, clients or customers who have not yet paid in full for any goods or services that your organisation has already supplied to them, are debtors to your organisation.

If this debt occurs before the end of one financial year, but is then paid in the next financial year, it should be included in first financial year’s accounts and recorded as a debt.

Creditors – A creditor is one party who is owed money by another – for example, suppliers who have provided your organisation with any goods or services that have not yet been paid for in full are creditors of your organisation.

Prepayments – A prepayment is when you pay an invoice or make a payment for more than one period in advance. For example, you may pay for your rent for three months in advance but want to show this as a monthly expense on your profit and loss.  Prepayments are a type of debtor.

Accruals – An accrual is when you pay for something in arrears. For example, you may receive an invoice for your electricity at the end of a quarter but want to record the payments before this. An accrual is usually based on an estimate. Therefore, when the invoice is received, you may need to make an adjustment to the final amount. An accrual is a type of creditor, money that you owe.

Accepting Coins in Payment

Legal tender has a very narrow and technical meaning in the settlement of debts. It means that a debtor cannot successfully be sued for non-payment if he pays into court in legal tender.  It does not mean that any ordinary transaction has to take place in legal tender or only within the amount denominated by the legislation.

Both parties to a transaction are free to agree to accept any form of payment whether legal tender or otherwise according to their wishes.

In order to comply with the very strict rules governing an actual legal tender transaction it is necessary, for example, to offer the exact amount due because no change can be demanded.

Coins are legal tender throughout the United Kingdom for the following amount:

£2 – for any amount

£1 – for any amount

50p – for any amount not exceeding £10

20p – for any amount not exceeding £10

10p – for any amount not exceeding £5

5p – for any amount not exceeding £5

2p – for any amount not exceeding 20p

1p – for any amount not exceeding 20p

Merging Charities?

Image result for merging charitiesThe merger of charities means two or more separate charities coming together to form one organisation. In such cases, either a new charity is formed to carry on the work or take on the assets of the original charities or one charity assumes control of another.

Before you start, decide whether merging is in your charity’s interests. It could be less risky and more efficient to work with another charity more informally. You should read the Charity Commission’s guidance on collaborative working, making mergers succeed and its mergers checklist.

When thinking about a merger, you must make sure that:

  • the governing documents of the charities involved allow the merger
  • all the charities involved have similar aims

Tips for successful mergers

  1. The merger should be in the best interests of the charities’ beneficiaries
  2. The charities involved must be compatible in objects, culture and values
  3. Effective communication with all stakeholders from the outset is vital – processes and outcomes should be clear to all involved
  4. The charities’ trustees should be united in believing that the merger is the best way forward
  5. Identify the key roles and responsibilities in the merger process
  6. Communicate and negotiate in a way that reflects the interests of all parties
  7. Contact the Charity Commission at an early stage if advice is needed