Here is What You Need to Know About Non-Profit Charity Organisations
Accounting is one of the key segments of any business. Bookkeeping is legally binding on every company. Even a charity organisation is no exception. However, there is a lower slab which defines the eligibility for any charity organisation to register with the Charity Commission or not.
Working for a charity organisation is definitely a great thing but there are certain things that you would need to know. Here are they:
What differentiates between a charity organisation and a company?
Though there is always a monetary aspect involved in any organisation that you work with, there are few elementary differences between a charity and a profit-seeking organisation.
- A charity organisation is characteristically a non-profit establishment to pursue any particular social goal. On the contrary, the sole motive behind a commercial organisation is seeking financial profit.
- Charity organisations don’t have a working capital, unlike commercial businesses. Instead, they depend on membership fees, contributions and donations for their funding.
- Charity accountants are not always required for non-profit organisations with an annual income below GBP 5,000. Hence, bookkeeping can be kept at bay.
Tax status for charity organisations
Charity organisations enjoy certain tax benefits. However, to take advantages of such tax exemptions, it is legally binding on the organisation to be registered under the HMRC (HM Revenue and Customs).
When is accounting required?
- Bookkeeping for a charity organisation is mandatory for the ones that earn over GBP 5,000 a year.
- If the annual earning is over GBP 10,000, it is legally binding on the organisation to submit an annual return to the Charity Commission.
- If the annual earning is anywhere between GBP 25,000 and GBP 250,000, the accounts must be prepared based on the payments and receipts.
Bookkeeping is a vital aspect of a non-profit if it is popular and is scaled up. This makes the management of the organisation a little more complex. But luckily, here at George M Kendall, we have thorough professional charity accountants in Carnforth at your service.
Do you have your bookkeeping to deal with? Get in touch with us today.