Disagreements and Disputes in Charities

conflict resolutionWhy internal disputes are a problem

Charity trustees, staff and members can sometimes disagree with each other over decisions about the charity.

A serious disagreement within a charity may cause the charity problems and damage its reputation.

It is your responsibility as trustees to try to resolve a disagreement or dispute. The Charity Commission can only get involved in exceptional circumstances.

How to resolve a dispute yourself

Your charity’s governing document may include a ‘disputes clause’ with procedures for dealing with a dispute. Even if it doesn’t, you should do everything you can to reach an agreement yourselves.

When to get external help

Charity trustees and members need to work together to settle any differences they have. If your trustees can’t reach an agreement and follow the directions in your governing document, you may need to look for some independent external help.

An independent third party will look at both sides and come up with some fresh ways to resolve the dispute.

If the dispute is about the way your charity is run, you could:

  • approach the charity’s national or umbrella body, if it has one
  • contact an organisation like the Advisory, Conciliation and Arbitration Service “ACAS”
  • ask a local church leader or community elder for help, if it is a religious dispute

Mediation

Mediation is a more formal way to settle disputes. It is a private and confidential process in which an independent person meets with both sides, helping them to reach a solution that everyone finds acceptable.

Mediation can be quick and cost-effective. Through mediation, both sides must agree to any solution, so it is more likely to be a lasting agreement.

If your dispute is taken to court, you will be expected to have tried mediation first.

WHEN to involve the COMMISSION

The commission can only get involved in internal disputes when:

  • there are no trustees (or correctly appointed trustees) in place, and
  • you can show that all attempts to resolve the dispute have failed

When the commission won’t get involved

The commission will not get involved if your dispute is about trustees’ decisions or policies. Trustees are free to make decisions for their charity, so long as they are acting within the law and within the rules of the charity’s governing document.

More detailed information can be found here

Statutory Maternity Pay and Pay Rises

Statutory Maternity Pay and LeaveEmployee earnings affected by a pay rise

A pay rise must not be withheld because of maternity leave.

You must recalculate the average weekly earnings (AWE) to take account of pay rises awarded, or that would have been awarded had your employee not been on maternity leave.

This applies if the pay rise was effective from anytime between the start of the 8 week relevant period for Statutory Maternity Pay (SMP) and the end of the statutory maternity leave.

If a pay rise is awarded after you’ve calculated your employee’s earnings, and that pay rise is effective from the start date of the relevant period but before the Maternity Pay Period (MPP) ends, you must:

  • recalculate the AWE to include the pay rise as though it was effective from the beginning of the relevant period
  • pay any extra SMP due

If a pay rise is awarded which, when recalculated, means that earnings are now high enough for your employee to get SMP when they could not before, you must:

  1. Work out 90% of the AWE.
  2. Take away the standard rate of SMP.
  3. Pay the difference for 6 weeks.

If 90% of the AWE is less than the standard rate you might not have to pay your employee anything.

This is because they may have received the balance of SMP due from Jobcentre Plus (or the Jobs and Benefits office in Northern Ireland) as Maternity Allowance (MA).

Not all women are entitled to MA, or the MA may be less than the SMP your employee is now entitled to. You should ask them to get a letter from the Jobcentre Plus (or the Jobs and Benefits office in Northern Ireland) to confirm how much MA was received.

If your employee gives you a letter from the Jobcentre Plus office (or the Jobs and Benefits office in Northern Ireland) showing how much MA was received:

  1. Work out the total amount of SMP they’re entitled to.
  2. Take away the MA that was paid.
  3. Take away any SMP you’ve already paid.
  4. Pay your employee the difference.

Your employee should still benefit from a pay rise, even if they do not intend to return to work with you after their maternity leave has ended.

If a pay award is made after they have terminated their employment and the pay rise is backdated to when they were working for you, or were on maternity leave with you, they may be entitled to benefit from the pay rise. You must check the terms of their old contract of employment.

If more than one pay rise has been awarded during the period they were on maternity leave you’ll need to make separate calculations for each one.

Further details can be found here

PAYE Form P60 for your employees

Form P60 pictureIf you employ staff, you must give all employees a P60 at the end of each tax year, if they are working for you on 5 April.  This must provide this by 31 May, on paper or electronically.  You can either:

You can’t download blank P45 and P60 forms.

Contact HMRC if you have problems ordering online, your order hasn’t arrived in 7 working days, or to order by telephone 0300 123 1074.

A P60 shows an employee the tax that has been paid on their salary during the tax year (6 April – 5 April).  They will get a separate P60 for each of their jobs.

They need this P60 to prove how much tax they have paid on their salary, for example:

  • to claim back overpaid tax
  • to apply for tax credits
  • as proof of their income if they apply for a loan or a mortgage

They can check how much tax they paid last year if they think they might have paid too much (https://www.gov.uk/check-income-tax-last-year)

Student Loan Repayments for 2 or more jobs

Student Loan RepaymentYou’ll only repay your student loan when your income is over the threshold amount for your repayment plan 

The threshold amounts change on 6 April every year

From 6 April 2020, the repayment threshold for pre-2012 (Plan 1) loans will rise to £19,390.

The repayment threshold for post-2012 (plan 2) loans will rise to £26,575 from 6 April 2020 to 5 April 2021.

Student Loan Repayment if you have 2 or more jobs

If you’re employed, your repayments will be taken out of your salary. The repayments will be from the jobs where you earn over the minimum amount, not your combined income.

Example

You have a Plan 1 loan.

You have 2 jobs, both paying you a regular monthly wage. Before tax and other deductions, you earn £1,000 a month from one job and £800 a month for the other.

You will not have to make repayments because neither salary is above the £1,577 a month threshold.

Example

You have a Plan 2 loan.

You have 2 jobs, both paying you a regular monthly wage. Before tax and other deductions, you earn £2,300 a month from one job and £500 a month for the other.

You will only make repayments on the income from the job that pays you £2,300 a month because it’s above the £2,143 threshold.

Annual Return Deadline Coming Up!

cartoon-alarm-clock-ringingWhen to submit your annual return

You must submit your annual return within 10 months of the end of your financial year

For example, if your financial year end was 31 March 2019, your deadline is 31 January 2020

INcome under £10,000

You only need to report your income and spending

Income between £10,000 and £25,000

You must answer questions about your charity in an annual return.

You do not need to include any other documents

Income over £25,000

You must answer questions about your charity in an annual return.

You will need to get your accounts checked and provide PDF copies of your:

  • trustee annual report
  • accounts
  • independent examiner’s report

You also need a full audit if you have:

  • income over £1 million
  • gross assets over £3.26 million and income over £250,000

Prepare your annual report and accounts first. You can then upload them when you complete your annual return.

DCAS Winter Newsletter

Our latest newsletter is now ready, and your printed copies should be on their way to you very soon – but if you can’t wait to read it, here is the online version!!

DCAS Newsletter Winter 2019Winter 2019 NewsletteerArticles covered in this issue:

  • Charity AGMs
  • Legal Requirements for Accounting Record
  • Step by Step Guide to Employing Staff
  • Starting a New Employee
  • Andrew Buxton Memorial Award 2019 Winners
  • Derby Association of Community Partners (DACP)

If you would like to be added to the mailing list, then please contact us here, and we will make sure that you are included for the next issue in the Spring

Government announces pay rise for 2.8 million people

Pay Rates 2020The Government has fully accepted the Low Pay Commission’s recommendations after they consulted stakeholders such as unions, businesses and academics, before recommending the National LIving Wage (NLW) and National Minimum Wage (NMW) rates to the Government.

National Living Wage (NLW) is paid to those aged 25 and over

To get the National Minimum Wage (NMW) you must be at least school leaving age, and the pay rates depend on your age and whether or not you are an apprentice

From 1st April 2020, The National Living Wage (for over 25 year olds) will increase 6.2% from £8.21 to £8.72.

The National Minimum Wage will rise across all age groups, including:

  • A 6.5% increase from £7.70 to £8.20 for 21-24 year olds
  • A 4.9% increase from £6.15 to £6.45 for 18-20 year olds
  • A 4.6% increase from £4.35 to £4.55 for Under 18s
  • A 6.4% increase from £3.90 to £4.15 for Apprentices, that is all apprentices under age 19 AND any apprentice, regardless of age, in first year of apprenticeship

Apprentices who are aged 19 years and over and not in their first year of apprenticeship are entitled to the National Minimum Wage appropriate to their age group as above

Deadlines For Filing Charitable Company Accounts

A Reminder from Companies House

If your charity is registered as a company with Companies House, and your year end is 31st March, your MUST file your company accounts with Companies House by 31st December

For other year end dates, the deadline is:

  • 9 months from the accounting reference date for a private company
  • 6 months from the accounting reference date for a public company

Please be aware of the definition of a period of months in connection with filing accounts. A period of months after a given date ends on the corresponding date in the appropriate month. For example a private company with an accounting reference date of 4 April has until midnight on 4 January of the following year to deliver its accounts, not 31 January. This does not apply if your accounting reference date is the last day of the month. In this case the period allowed for filing accounts would end with the last day of the appropriate month. For example a private company with an accounting reference date of 30 April has until midnight on 31 January of the following year to deliver its accounts, not 30 January.

If a filing deadline falls on a Sunday or Bank Holiday, the law still requires you to file the accounts by that date. To avoid a penalty, please ensure that you send acceptable accounts in time to arrive before the deadline.

It’s the date that you deliver acceptable accounts which meet the relevant legal requirements to Companies House that is important, not the date that you sent the accounts.

Outputs and Outcomes

When completing a funding applicaiton, you could be asked to explain all the expected results that will be achieved by the projectOutputs and Outcomes

Outputs are those results which are achieved immediately after starting the project:

For example, when seeking funding for a Basic Book-Keeping Course, participants attending an initial workshop would get a clear understanding of the basic principles involved, so this is the Output that the project has achieved right after the first part of the course.

Outcomes would be, for example, when participants have begun to implement these Basic Book-Keeping principles within their organisation