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  • Who is entitled to Minimum Wage?

    People classed as ‘workers’ must be at least school leaving age to get the National Minimum Wage. They must be 23 or over to get the National Living Wage.

    Contracts for payments below the minimum wage are not legally binding. The worker is still entitled to the National Minimum Wage or National Living Wage.

    Workers are also entitled to the correct minimum wage if they’re:

    • part-time
    • casual labourers, for example someone hired for one day
    • agency workers
    • workers and homeworkers paid by the number of items they make
    • apprentices
    • trainees, workers on probation
    • disabled workers
    • agricultural workers
    • foreign workers
    • seafarers
    • offshore workers

    Apprentices

    Apprentices are entitled to the apprentice rate if they’re either:

    • under 19
    • 19 or over and in the first year of their apprenticeship

    Apprentices over 19 who have completed the first year of their apprenticeship are entitled to the correct minimum wage for their age.

    Not entitled to the minimum wage

    The following types of workers are not entitled to the National Minimum Wage or National Living Wage:

    • self-employed people running their own business
    • company directors
    • people who are volunteers or voluntary workers
    • workers on a government employment programme, such as the Work Programme
    • members of the armed forces
    • family members of the employer living in the employer’s home
    • non-family members living in the employer’s home who share in the work and leisure activities, are treated as one of the family and are not charged for meals or accommodation, for example au pairs
    • workers younger than school leaving age (usually 16)
    • higher and further education students on work experience or a work placement up to one year
    • people shadowing others at work
    • workers on government pre-apprenticeships schemes
    • people on the following European Union (EU) programmes: Leonardo da Vinci, Erasmus+, Comenius
    • people working on a Jobcentre Plus Work trial for up to 6 weeks
    • share fishermen
    • prisoners
    • people living and working in a religious community

    Employers who offer internships (sometimes called ‘work placements’ or ‘work experience’) should check if the person is entitled to the minimum wage.

    Voluntary work

    You’re classed as doing voluntary work if you can only get certain limited benefits (for example reasonable travel or lunch expenses) and you’re working for a:

    • charity
    • voluntary organisation or associated fundraising body
    • statutory body

    Contact the Acas helpline to find out if you should be getting the minimum wage.

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  • Independent Examination of Accounts

    How to appoint a suitable person to carry out the independent examination

    The trustees have a legal duty under the Charities Act 2011 to appoint ‘an independent person who is reasonably believed by the trustees to have the requisite ability and practical experience to carry out a competent examination of the accounts’.

    ‘The requisite ability and practical experience to carry out a competent examination’

    The examiner must have the skills and experience needed to carry out his or her responsibilities. The starting point for all independent examiners is an understanding of their responsibilities, as explained in Independent examination of charity accounts: examiners (CC32). All examiners must also understand the key governance and reporting requirements that are specific to charities. These include the responsibilities of trustees and the requirements to produce a trustees’ annual report and to account for the different types of charitable funds. Whatever their skills and professional qualifications, new examiners who are not familiar with the charity sector will need to gain this background knowledge before starting their examination.

    An examiner must also have sufficient accounting skills to carry out an independent examination.

    The trustees may find it helpful to draw up a set of questions to ask their proposed examiner to help them check that the person has the skills and experience needed. You should ask:

    • all examiners, to confirm that they have read and understood the Commission’s Directions and guidance
    • professional examiners, to provide proof of membership of one of the professional bodies listed in the appendix and that they meet that body’s requirements for acting as an independent examiner. In particular, the examiner is likely to need a practising certificate or licence, although if he or she is not charging a fee to carry out the independent examination this may not be necessary. This check can be done using each body’s on-line member search tool, or directly if the body does not have this facility
    • non-professional examiners, to explain their skills and experience and why this makes them competent to carry out the work. For example, the examiner may work in a role that involves financial management, such as setting and managing budgets and reviewing financial reports, or that requires knowledge of accounting systems, such as maintaining financial records and internal controls

    The trustees’ decision to appoint a person to act as the charity’s examiner should be in writing and recorded in the charity’s minutes. The examiner should confirm their appointment and this can be done by an exchange of emails. Professional examiners may issue a letter of engagement, setting out the terms of their appointment including their fee.

    The process of finding and appointing an examiner can take time and so should not be left until the trustees’ annual report and accounts are due for filing.

    Each year, check that the independent examiner remains independent and has the ability and experience needed

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  • Employment Allowance

    Are you missing out?

    Are you Eligible?

    You can claim Employment Allowance if you’re a business or charity (including community amateur sports clubs) and your employers’ Class 1 National Insurance liabilities were less than £100,000 in the previous tax year.

    You can also claim if you employ a care or support worker.

    You can claim Employment Allowance for the previous 4 tax years dating back to the 2018 to 2019 tax year. Some of the rules for claiming are different.

    What you’ll get

    Employment Allowance allows eligible employers to reduce their annual National Insurance liability by up to £5,000.

    You’ll pay less employers’ Class 1 National Insurance each time you run your payroll until the £5,000 has gone or the tax year ends (whichever is sooner).

    You can only claim against your employers’ Class 1 National Insurance liability up to a maximum of £5,000 each tax year. You can still claim the allowance if your liability was less than £5,000 a year.

  • Emergency Tax Codes

    Your tax code is used by your employer or pension provider to work out how much Income Tax to take from your pay or pension. HM Revenue and Customs (HMRC) will tell them which code to use.

    If your tax code ends in ‘W1’ or ‘M1’ or ‘X’ you’re on an emergency tax code. For example:

    • 1257L WI
    • 1257L MI
    • 1257L X

    You may be put on an emergency tax code if HMRC does not get your income details in time after a change in circumstances such as:

    • a new job
    • working for an employer after being self-employed
    • getting company benefits or the State Pension

    Emergency tax codes are temporary. HMRC will usually update your tax code when you or your employer give them your correct details. If your change in circumstances means you have not paid the right amount of tax, you’ll stay on the emergency tax code until you’ve paid the correct tax for the year.

    Updating your details

    Your employer can help you update your tax code by sending details about your previous income or pension to HMRC.

    If you’ve started a new job

    Give your employer your P45 from your previous job. If you do not have a P45, your employer should ask you for the information they need instead.

    If you’ve started working for an employer after being self-employed

    Your employer should give you a ‘starter checklist’ – this is a form you can use to give them details about your previous employment.

    If you’ve started getting company benefits or the State Pension

    Check your tax code online to make sure it includes the State Pension or company benefit. If they’re not included, update your details in the tax code online service or by contacting HMRC.

    The emergency tax code will stay in place until the end of the tax year. This means you’ll pay the right amount of tax for the current tax year. In the new tax year HMRC will put you on a regular tax code.

    Sign into your personal tax account to check or update your details with HMRC.

  • Leave and Pay When Someone Dies

    Acas working for everyone - Home

    Most people will experience the death of a person close to them during their working lives.

    Grief is a natural response people have when they experience a death (a bereavement). It can affect someone in several ways and can impact on their ability to do their work.

    If you have experienced the death of a person close to you, or you’re supporting an employee through a bereavement, you might be experiencing a range of emotions that are having an impact on your work.

    ACAS has put together some good and helpful advice and support

    The right to time off

    Anyone legally classed as an employee has the right to time off if:

    • a ‘dependant’ dies
    • their child is stillborn or dies under the age of 18

    If an employee’s dependant dies

    Anyone legally classed as an employee has the right to time off if a dependant dies. A dependant could be:

    • their husband, wife, civil partner or partner
    • their child
    • their parent
    • a person who lives in their household (not tenants, lodgers or employees)
    • a person who relies on them, such as an elderly neighbour

    There’s no legal right for time off for dependants to be paid, but some employers might offer pay. Employers and employees should check the employee’s contract or the organisation’s policy.

    How much leave can be taken

    The law does not say how much time can be taken off if a dependant who is not someone’s child dies. It simply says the amount should be ‘reasonable’.

    This time off is for dealing with unexpected issues and emergencies involving the dependant, including leave to arrange or attend a funeral.

    Check your bereavement policy

    If your organisation has a bereavement policy, it should say:

    • when leave for bereavement could apply
    • how much leave your organisation provides
    • if leave is paid, and the amount of pay

    This might be called ‘compassionate’, ‘bereavement’ or ‘special’ leave.

    View Acas’s bereavement policy template

    If there’s no policy

    Employers should discuss with the employee:

    • what type of leave for bereavement is available
    • how much time off is available
    • whether the leave will be paid or unpaid

    The time off could be treated as sick leave, or if the employee requests, could be taken as holiday. Employers should be consistent and clear with the approach they take to supporting employees and confirm any decisions with their employees in writing.

    Find out more about the benefits of a bereavement policy

    Time off for a funeral

    An employee has the right to time off for a funeral if the person who died was a dependant.

    There’s no legal right to time off for a funeral if the person who died was not a dependant. However your organisation might offer time off. This time off might be called ‘compassionate leave’ or ‘special leave’.

    More information and advice can be found at the ACAS website here

  • Charities and VAT registration

    As a charity, you must register for VAT with HM Revenue and Customs (HMRC) if your VAT taxable turnover is more than £85,000.

    You cannot register for VAT if all your business activities are exempt from VAT.

    If you’re registered for VAT you must send a return every 3 months.

    Charging VAT

    Once you’ve registered you must charge VAT at the correct rate on everything you supply.

    Work out your taxable turnover

    To work out your VAT taxable turnover add up the total value of everything you sell in a 12-month period that is not:

    • exempt from VAT
    • outside the scope of VAT

    Check what VAT rate applies to your charity’s activities.

    Reclaiming VAT

    If you’re registered you may be able to reclaim VAT when you file your VAT Return.

    You can reclaim the VAT you were charged on goods and services relating to your taxable business activities.

    More detailed information can be found here

  • ‘My Charity Commission Account’

    Important news from the Charity Commission:


    From 31 July 2023, ‘My Charity Commission Account’ is the new way for trustees and charity contacts to access the Charity Commission’s online services. It can also be used by other people you have authorised, such as your accountant or lawyer.

    Your account, and your level of access to our online services, depends on your role within, or relationship with, the charity. The different accounts, with the corresponding levels of access, are outlined below.

    Charity contact / primary administrator

    You will have this account if you are registered with the Charity Commission as the contact for your charity. This is usually a trustee but could be an employee or a legal advisor or accountant.

    As the charity’s contact, you will be the classed as the ‘primary administrator’ and will have a ‘full access’ account.

    Trustee account

    If you are a charity chair or trustee, you will:

    • have access to all our online services for your charity
    • be able to update and maintain your own personal details, but not those of other trustees, third parties or the charity contact
    • be able to see the names of the other trustees and their dates of appointment only
    • be able to block the charity contact and super administrator from seeing your personal information.

    An administrator can also grant you some administrative rights if it is necessary.

    Third-party account

    If you are, for example, an employee of the charity (who is not the charity’s contact) or a professional advisor for the charity such as an accountant or lawyer, you may need access to our online services on the charity’s behalf.

    If you are a third-party user, you will:

    • have access to sections of our online services that are appropriate for the activity you are undertaking for the charity
    • be able to access, update and maintain your own personal details, but not that of any trustees, third parties or the charity contact

    More detailed information can be found here

  • Safeguarding for Charities and Trustees

    All charities have a responsibility to ensure they don’t cause harm to anyone who has contact with them. Charities working with children or adults at risk have extra responsibilities.

    As a trustee you must make sure your charity fulfils this responsibility. Even if you delegate some activities to a safeguarding lead or group, you retain overall responsibility.

    Harm and abuse have a devastating impact. A strong safeguarding culture means:

    • you protect people
    • you minimise the risks of any harm or abuse
    • everyone has confidence their concerns will be dealt with appropriately
    • everyone at the charity understands their role

    Every trustee must make sure their charity undertakes these 5 actions:

    1 Identify and manage risks

    2 Have suitable policies and practices in place

    3 Carry out necessary checks

    4 Protect your volunteers and staff

    5 Handle and report incidents appropriately

    Read more detailed safeguarding guidance from the Charity Commission.

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  • When to Change Charity Structure

    How to change an unincorporated association or trust to a charitable company or CIO, plus other types of conversion.

    Your charity’s legal structure sets out what type your charity is. There are four common types of charity structure:

    • Charitable Incorporated Organisation (CIO) – there are 2 structures: association CIO and foundation CIO
    • charitable company (limited by guarantee)
    • unincorporated association
    • trust

    Your charity’s legal structure determines:

    • who will run it and whether it will have a wider membership
    • whether it can enter into contracts or employ staff in its own name
    • whether its trustees are personally liable for what it does

    Changing to a different charitable structure usually involves:

    1. setting up a new charity in the new structure, with purposes that are the same as or similar enough to those of the original charity
    2. transferring your original charity’s assets and liabilities to the new charity, then
    3. closing your original charity

    This can be complex, particularly if your charity has assets which are permanent endowment and you should take appropriate professional advice. For example, on the transferring of assets, contracts or liabilities, or where your charity has permanent endowment.

    Read Charity types: how to choose a structure (CC22a) for more information on the advantages and disadvantages of the different types of charity structure.

    There is useful checklist available here

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  • Independent Examination of Charity Accounts: Who is independent?

    The trustees will usually be able to choose an independent examination instead of an audit if your charity’s gross income is:

    • more than £25,000, but not more than £1 million, provided that
    • if its gross income is more than £250,000, its gross assets (fixed assets plus current assets) are £3.26 million or less

    The trustees have a legal duty under the Charities Act 2011 to appoint ‘an independent person who is reasonably believed by the trustees to have the requisite ability and practical experience to carry out a competent examination of the accounts’.

    ‘An independent person’

    The examiner must be independent of the charity. Independence means that the examiner must not be influenced, or could not be perceived to be influenced, by their relationships with the charity and its trustees. Therefore, the examiner cannot be a trustee of the charity. Independence is not the same as having no connection with the charity. An examiner can be a supporter of the charity, provided that they do not have a close relationship with the charity or its trustees and they are not involved in the day to day administration of the charity. Examples of situations that would call an examiner’s independence into question are where they:

    • are an employee of the charity or its book-keeper
    • serve on a sub-committee overseeing the charity’s finances
    • are a major donor to, or beneficiary of, the charity
    • have a significant financial or commercial relationship with the charity or its trustees
    • have a close relationship with the trustees or any other related parties. Direction 2 of Independent examination of charity accounts: examiners (CC32) provides guidance on the persons classed as related parties

    If the trustees are unsure whether their proposed examiner is independent, they should ask the examiner to explain in writing why they consider that they meet the independence criteria. The trustees should then consider whether they are satisfied with the explanations given.

    The trustees must respect the examiner’s independence and must not act in a way that might undermine it. Accordingly, the trustees must not state or imply that awarding the work is conditional on the examiner agreeing to:

    • provide personal payments or benefits to the trustees, or provide donations of money, benefits in kind or services to the charity (other than the conduct of the independent examination itself), or
    • accept particular accounting policies or accounting treatments

    The Commission views such behaviour as unethical. It may also constitute an offence under the Bribery Act 2010 (see Law on bribery), or of a breach of duty or other misconduct or mismanagement in the administration of your charity. For a trustee who is a member of a professional body it may also be a breach of their professional body’s ethical standards.