2022-08-31-accounts - Park View Community Centre

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Company registration nurnber.. 08174241 Chartty registration number.. 1148865 PARK VIEW COMMUNITY CENTRE IA company limiled by guarantee) Annual Report and Financial Ststements for the Year Ended 31 August 2022

Park View Community Centre Contents Reference and Administrative Details Trustees, Report 2toS Independent Auditors. Report 6108 Statemelll of Finanal Activities St8tement of Finanaal Acltvities io Balance Sheet Notes lo the Financial Statements 121021

Park View Community Centre Reference and Administrative Details Trustees P A Adamson Dr W F Dennison M Dodd G Crawford J Graham (resigned 1 June 2022) A Finley Secretary E L Hagar Registered Offlce Church Chare Chester le Street Co Durham DH3 3PZ The charity is incorporated in England and Wales. Company Registration Number 08174241 Charity Registration Number 1148865 Solicitors.. Muckle LLP Time Central 32 Gallowgate Newcastle Upon Tyne Tyne And Wear NE14BF Bankers LYS Bank PIC Chester Le Street Branch PO Box 1000 BX1 1LT Audltor Azels Audit Services Bulman House Regent Centre Gosforth Newcastle upon Tyne NE3 3LS

Park View Community Centre Trustees. Report The trustees, who are directors for the PUTposes of company law, present the annual report together with the financial slalemenls and auditors, report of the charitsble company for the year ended 31 August 2022. Structure. governaTrce and management Nature of goveming document The charity is controlled by its goveming document. a deed of trust. and consts"lutes a limited company, limited by guarantee. as defined by the Companies Act 2006. The Centre is organised and controlled by a Board of Directors which meets as and when required but al least 3 times a year. Recrultment and appointment of trustees Each Director lolher than the Nominated Direclorsl shall retire from office al the conclusion of the fourth Annual Trustees Meeting followng the commencement of his or her term of office bul shall then be eligible for reapwintment. Induction and training of trustees The training and induction provided for new Directors depends on their existing experience. Where necessary, induction and Irair)ing is provided on charity. legal and financial mallers. All Directors are provided with copies of policies, procedures, minutes, accounts. budgets, plans and other documents that they will need to undertake their role as Directors. As there would usually only be one or two new Directors in any year. inductions lend lo be done informally and tsilored specifically lo the individuallsl. Organisational structure The Directors meet regularty. Decasions al Directors, meetings are made by majority vote with the Chairman having the casting vole on split decisions. The Board of Directors comprise the key management personnel of the charity. No Directors. remuneration was paid by the charity. The parent company, Park View Academy, recharges various expenses, which relate to the charitable aclivilies, back lo the charity. Objectives and activitles Objects and alms Th8 charity's objectives are for the benefit of the general public and in particular the inhabilanls of Chester-le-slreet and its surrounding aaS to promote. wthout discrimination of sex or political, religious or other opinions, by association with the local authorities, voluntary organisalions and the inhabitants in 8 common effort lo advance education and provide faolilies in the interests of social WeMa for recreation and leisure time occupation wrth the objecl of improving the conditions of life for the said inhabitants in particular by: {al utilising the facilities at Park View Academy. and other appropriate facilities within the area of benefit in the interests of social welfare for reCa.0 and leisure time occupats'on with the object of improving the condibons of life for the said inhabi18nls- Ibl encouraging the co-operation of the Academy and other organisations within the area of benefit to their mutual benefit; Icl co-operating with the Aca¢Jemy in relation to the maintenance, management and. where appropriate, deveh)pm8nl of facilities available for joint use at the Academy in furtherance of the above objects.

Park View Community Centre Trustees. Report Fundraising diTsclosures The charity is required to report how it deals with fundrdising from the public. The charity dS not use a professional fundraiser or commercial participator lo raise funds. Any monies raised direct from the public follows all guidelines sel out by the Charity Commission and UK law in every respect. We respect the privacy and contact preferences of all public donors. Public benefit The charitys aims and achievements are set out within this report. The activities sel out in this report have begn undertaken lo further the charitys charitable purposes for the public benefit. The Iruslees confirm that they have complied with the requirements of section 17 of the Charities Act 2011 to have due regard lo the public benefit guidan published by the Charity Commission for England and Wales. Going concern The trustees have prepared forecasts which show th8t, tsking into account reasonable possible changes in trading performance. that the charity has SLrffic¢enl cashflows to continue as a going concem. This is based on the continued support of the parent company. The trustees have stress lesled their forecasts, under various scenarios, and Main confident that the uncertainties do not cast significant doubl on the tx)mpany's ability lo continue as a going concern. Achievements and perforniance The Community Centre started the finanal year with further disruption from Covld and 811 indoor activikn'es were dosed for a brief period from 29th September to 15th October. Following this the Community Centre has remained open to LKJth indTh)r and outdoor use of the facility and usage has in¢ased 5ignificantiy compare(I lo the previous (x)uple of years. In particular. Dance and Theatre groups have returned this year followng a couple of absent years due lo Covid. Crossfit no longer occupies the premises of the Community Centre as this space has been feclaimed by Park View School for post 16 student classroom space. The Community Centre has wot1(ed in partnership wlh Park Wwi School to invest money into refurbishing the original gym space and has installed new gym eouipmenl and flooring. The Community Centre is hoping to hire out the gyTn faolities lo the wider community outside of school hours from January onwards. The followng grants from Durham County Counol have been recerved during the year. Covid 19 Community Grant £3,000 Omicron Hospitality & Leisure Grant £2.667 A café was opened during the year wtthin the Community Centre to provide a place for users to socialise and enjoy some refreshments. In general the outlook for the Community Centre continues to be positive with a view lo remaining open for the wider community lo access the facilities on offer. Flnancial review The charity generated income of £107.353 in the ar (2021.. £112,727) and expenditure of £133,782 {2021: £111.5061 resuhing in a deficit of £26,429 {2021'. surplus of £1,221).

Park View Community Centre Trustees, Report Poll¢y on reserves The Centre is required lo raise and maintsin an income by way of grants. donations and charges for services lo meet ils immediate financial needs for facilits'es access, staffing. materials. equipment. the purchase of external services and lo continue lo build on its reseNes in order to continue lo provide for future capital and revenue needs. Thg Centre currently holds ils financial resources in a charge free current account, providing immediate access for regular spending commitments and a nijmber of investment accounts for its savings and investment needs. Regular reports on the status of these accounts are provided lo the Board of Directors by the Finance Officer. Future revenue needs of the Association include an annval facilities access charge, payable lo the Academy, ongoing stsffing costs. maintenance, repairs and renewals, materials, services, rents, taxes. subscriptions, Sections expenses (Member Sections of the Association) and general overheads. Al the year end, free reserves were £17.466 (2021.. £27,218}. a decrease of £9.752 in the year. Principal funding sources The principal sources of revenue funding during the period were: Durham County Council. Big Lottery., Sports England., Sew generated income from classes held and the hire of facilities. Key Managem8nt Personnel The board, who give their time freety, and Iruslees received no remuneration in the year. have considered that there is no Key Management Personnel {KMP) within the charity. Management of the charity is performed by ils parent entity. Park View Academy. Plans for future periods Aims and key objectives for future period$ Future Plans The stsrt lo the year has begun positivety plenty of block bookings carried out online for both indoor and outdoor usage. The Community Centre is proposing lo change the staffing slructure lo have a senior worker working th three leisure attendants in post. The positions wovkl allow a dedicated member of staff to be on sile at all times and should improve efficiency and communication. Promotion of the gyTn will be ongoing to increase usage to attract new members of the community lo use the facilities on offer.

Park View Community Centre Trustees. Report ststement of Trustees. Responslbllltles The Iruslees Iwho are also the directors of Park view Community Centre for the purposes of company lawl are responsible for preparing the trustees. report and the financial statefflents in accordance with the United Kingdom Accounting Standards {United lfjngdom Generally Accepted Accounting Practice) and applicable law and regulations. Company law requires the trustees lo prepare ffin8nc¥al statements for each financial year. Under company law the trustees must nol approve the fin8naal statements ijnless they are satisfied thal they givg a true and fair vW of th8 slate of affaits of the charitable company and of its incoming resources and application of resources. including its income and expenditure. for that period. In preparing these financial stalemenls. the trustees are required lo= select suitable accounting tKAicies and apply them consislenty.. observè the methods and princIe$ in the Chaiities SORP" make judgements and eslimales that are reasonable and pNdent- stsle whether applicable UK Accounting Standards have been followed, subject lo any material departures disclosed and explained in the financial statements,. and prepare the financial s18tements on the going concem basis unless it is inappropriate to presume that the charitable company will continue in business. The Iruslees are responsible for keeping adequate accounting rerdS that are SLrfficient to show and explain the charitable companls transactions and disclose wlh reasonable accuracy al any lime the financial position of the charitable company and enable Ihern to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assels of the charitable company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. Disclosuro of information to audltor Each trustee has taken steps that they ought to have taken as a trustee in order lo make themselves aware of any relevant audit infom)alion and to establish that Ihe charrty's auditor is aware of that information. The trustees confim that there is no relevant information that they know of and of which they know the auditor is unaware. Reappointment of auditor Azels Audit Services Limited, trading as Azels Audit SerVe$. were appointed auditor lo the company following their acquisition of the trade of Tait Walker LLP. trading 8s MHA Tait Walker. on 1 May 2022. In accordance with section 485 of the Companies Act 2006, a resolution for the re-8ppoinlmenl of Azels Audit Services as auditors of the charity is lo be proposed at the forthcoming Annual General Meeting. The annual report was approved by the trustees of Ihe chartty on 8 December 2022 and signed on its behalf by.. ennison Trustee

Park View Community Centre Independent Auditor's Report to the Members of Park View Community Centre Oplnion We have audited the financial statements of Park View Community Centre lthe charily'l for the year endeLI 31 August 2022, which comprise the Statement of Financial Activib"es. Balance Sheet. and Notes to the Financial Statements, including a summary of significant accounting policies. Th8 rinancial reporting framework that has been applled in their preparation is United Kingdom Accounting Standards, comprising charits SORP - FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland. and applicable law (United Kingdom Generally Accepted Accounting Practice). In our opinion the financial slatemenls= give a true and fair view of the state of the charitys affairs as al 31 August 2022 and of its inming resources and apPIation of resources. including ils income and expenditure for the year then ended., have been property prepared in accordance th United Kingdom Generdlty Accepted Accour)ling Practice,. and have been prepared in accord8nce wilh the requirements of the Companies Act 2006. Basis for opinion We conducted our audit in accordan¢* bvilh Intemalional Stsndards on Auditing IUKI IISAS IUKII and applicable law. Our responsibilities under those standards are further described in the auditor responsibilities for the audit of the finanal statements section of our report. We are independent of the charity in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, inclu¢Jing the FRC'S Ethical Standard, and the provisions available for small entities, in the circumstances set out in note to the financial slalemenls. and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit eviden we have obtained is sufficient and appropriate to provide a basis for our opinion. Conclusions rolating to going concern In auditing the financial stslements, we have conduded that Ihe Iruslees use of the going concem basis of accounting in the preparation of the financial statements is appropriate. Based on the work we have perfomied. we have not Identff any material uncertainties relating lo events or conditions that, individually or co1cliVelY. may cast significant doubl on the charity's ability lo continue as a going concern for a period of at least twefve months from when the financial statements were aulhorised for issue. Our responsibilities and the responsibilities of the tnjslees with respect to going concern are described in the relevant sections of this report. Other Infomiatlon The trustees are responsible for the other information. The other information comprises the infom)ation induded in the annual report. other than the financial statements and our auditor's report Ihereon. Our opinion on the financial statements does not cover the other information and, except lo the exlenl otherwise explicitly staled in our report, we do not express any form of assurance conclusion Ihereon. In connecb'on with our audit of the financial slat8menls. our responsibility is to read the other information and, in doing so, consider whether the oiher infomiation is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears lo be materially misstated. If we identify such material inwnsislencies or appare[71 material misslalemenls, we are required lo determine whether there is a material misstatement in the financial slalemenls or a material misstatement of the other infomiation. If, base¢J on the work we have performed. we conclude that there is a malerial misstatement of this other information, we are required lo report that fact.

Park View Community Centre Independent Auditor's Report to the Members of Park View Community Centre We have nothing to report in this regard. Opinlon on other matters prescribed by the Companles Act 2006 In our opinion, based on the Wofk undertaken in the course of the audf(: the inf0Mtion given in the Trustees. Report for the financial year for which the financial statements are prepared is consistent wth the finanryal stalements,. and the Trustees, Rep has been prepared in accordance wth applicable legal requirements. Matters on which we are required to report by exception In the light of our knowledge and understanding of the charity and ils environment obtained ir¢ the course of the audit. we have not identified mateiial misstatements in the Trustees. Report. We have nothing to report in respect of the followThJ matters where the Companies Act 2006 requires us lo reFX)rt lo you if, in our opinion- adequats accounting records have not been kept, or retums adequate for our audit have not been received from branches not visited by us.. or the financial stslements are not in agreement with the aUntrng records and retums.. or certain disdosures of trustees remuneration specified by law ale not made- or we have not received all the infom)alK)ll and explanations we require for our audit. Responsibilities of trustgas As explained more fully in the Statement of Trustees. Responsibilities Isel out on page 51, the trustees are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the trustees determine is necessary to enable the preparation of financial statements that are free from material misstalemenl. whether due to fraud or error. In preparing the financial statements, the trustees are responsib for assessing the charity's ability lo continue as a going concem, disclosing, as applicable, matters related to going concem and using the going concern basis of accounting unless the trustees either intend to liquidate the charity or to cease operations, OT have no realistic alternative but lo do so. Auditor responslbllltles for the audit of the financlal statements Our objectives are lo obtain reasonable assurance atxjul whether the finanual slalements as a whole are free from material misstatement. whether due lo fraud or error. and to issue an auditor's report that includes our opinion. Reasonable assurance is a high Ve1 ol assurance, bul is not a guarantee that an audit conducted in accordan %Mth ISAS {UKI will ahvay3 del1 a material misstalemenl when it exists. Misslalements can arise from fraud or error and are considered material if, individually or in the aggregate. they could reasonably be expected to Influen the eConoC deasions of users tsken on the basis of these finanaal slatemenls. Irregularities, induding fraud. are instances of non-compliance wth IAWS and regulations. We design procedures in line wlh our responsibilities. otjdined atx)ve. to delecl material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of delecling irregularities, including fraud is detailed below..

Park View Community Centre Independent Auditor's Report to the Members of Park View Community Centre Enquiries WTth management. about any knolvn or suspected instances of non-compliance with laws and regulations and fraud.. Reviewing board minutes.. Challenging assumptions and judgements made by management in their significant accounting estimates., and Auditing the risk of management override of controls, including through 1gSting joumal entries and other adjustments for appropriateness. Because of the field in which the dienl operate5, we identified the follong areas as those most likety lo have a material impact on the financial slatemenls.. Health and Safety,. employ)nenl law (including the Working Time Directive)" and. compliance the UK Companies Act arKJ Charities Act. Owing to the inherent limitations of an audit, there is an unavoidable risk that some malgrial misstatements in the financial statements may not be delected, even though the audit is property planned and perfomied in accordance wtih the ISAS IUK}. For ir)stance, the further removed non-compliance is from the events arKI transacbons reflecte(J in the financial slatemenls. the less likely the auditor is to become aware of it or to recognise the non-compliance. A further description of our responsibilities is available on the Financial Reporting Council's website at: swM.frc.org.ukJaudilorsresponsibilities. This description forn part of our audilorfs report. Use of our rgport This report is made solely to the charitable company's trustees. as a body. in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audil Work has been undertaken so that we might stsle lo the charity's trustee5 those matters we are required to stale lo them in an auditor's report and for no other purpose. To the fullest extent pemiilled by law, we do not accept or assume responsibility to anyone other than the charilatAe company and ils Iruslees as a body, for osjr audit work, for this report, or for the opinions we have formed. Brian Laidlaw BA CA (Senior Statutory Auditor> For and on behalf of Azets Audit Services Chartered Accounlanls Stsiulory Auditor Bulman House Regent Centre Gosforth Newcastle upon Tyne NE3 3LS Date.. Azets Audit Services is a trading name of Azets Audst Services Limited

Park View Community Centre Statement of Financial Activities for the Year Ended 31 August 2022 (Including Income and Expenditure Account and Statement of Total Recognised Gains and Losses) Total 2022 Total 2021 Unrestricted Restrlded Note Income and Endowments from: Charitable activities Other trading a¢tsvilies 96.624 5,062 5.667 102,291 5,062 111,767 960 Total Income 101.686 5,667 107,353 112.727 Expenditure on: Raising funds Charitable adivities (5.213) 112.752 (5,2131 128.569 15,817 111,506 Total Expenditure 117,965 15.817 133,782 111,506 Net lexpendilure}lincome 16,279 10.150 26.429 1,221 Net movement in funds (16.2791 {10.150) 126,4291 1,221 Reconciliation of funds Totsl funds brought forward Total funds carried forward 35,128 24.617 59.745 58.524 18 18.849 14,467 33.316 59.745 All of the charity's activities derive from continuing operalions during the above periods. The funds breakdown for 2021 is shown in Th)te 18.

Park View Community Centre Comparative Statement of Financial Activities for the Year Ended 31 August 2021 (Including Income and Expenditure Account and Statement of Total Recognised Gains and Losses) Total 2021 Unrestrieted Restricted Note Income and Endowments from: Charitable activities Other trading a1VitieS Total income 102.407 960 9,360 111.767 960 103,367 9,360 112,727 Expenditure on: Charitable activities 106,636 4,870 111,506 Total expenditure 106,636 4,870 111,506 Net lexpenditureyineome 3,269 4.490 1,221 Nel movement in funds 13.2691 4.49) 1,221 Reconciliation of funds Total funds brought fomard Total funds carried forward 38,397 20,127 58.524 18 35.128 24.617 59,745 10

Park View Community Centre (Registration number.. 08174241) Balance Sheet as at 31 August 2022 2022 2021 Note Fixed assets Tangible assets 12 14.412 32.527 Current assets Stocks Debtors Cash al bank and in hand 13 14 50 25,966 9,875 11,873 56,560 68,433 35,891 Crgditors.. Amounts falling due within one year 15 49,529 8.673 Net ¢urrenl assets 18,904 27.218 Net assets 33,316 59,745 Funds ofthe charlty: Restrlcted Income funds Reslricled funds 18 14.467 24.617 Unrestricted income funds Unrestricted funds 18,849 35.128 Total funds 18 33.316 59,745 The financial statements on pages 9 to 21 were approved by the trustees, and authorised for issue on 8 December 2022 and signed on their behalf by. son

Park View Community Centre Notes to the Financial Statements for the Year Ended 31 August 2022 I Charlty status The charity is limited by guarantee. incorph)rated in England and Wales, and consequently does not have share capital. Each of the trustees is liable to contribute an amount not exceeding £Nil towards the assets of the charity in the event of liquidation. The addsS of ils registered office is.. Church Chare, Chester le Street, Co Durham. DH3 3PZ 2 Accounting policies Summary of significant accounting policies and key accounting estimates The pllncipal accounting policies applied in the preparation of these financial slalemenls are set out below. These policies have been consistenlty applied to all the years piesenled, unless otherwise stsled. statement of compliance The financial stslemenls have been prepared in accordance with Accounting and Reporting by Charities.. Stslemenl of Recommended Practice applicable lo charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland IFRS 102} leffeclive 1 January 20191- Ichartties SORP {FRS 10211, the Financial Reporting Standard applicable in the UK and Republic ol Ireland {FRS 1021- They also comply with the Companies Act 2006 and Charities Act 2011. Basis of preparation Park View Community Centre meets the definition of a public benefit entity under FRS 102. Assets and liabilities are inilialty recconised al histl¢al cosl or transaction value unless otheiwise slated in the relevant accounting policy notes. The functional currency of the charity is steding. Going concern The financial slalements have been prepared on a going conc£m basis. The Iruslees assess whether the use of going concem is appropriate i.e. whelher there are any material uncertainties related to events or conditions that may cast significanl doubl on the ability of the charity lo continue as a going conrn. The trustees make this assessment in respect of a period of one year from the dale of approval of the financial statements. Exemptlon from preparing a cash flow statement The charily opted to adopt Bulletin 1 published on 2 February 2016 and have therefore not included cash flow slalemenl in these financial slalements. 12

Park View Community Centre Notes to the Financial Statements for the Year Ended 31 August 2022 Estlmatlon uncerLiinty and Judgements The preparation of the fi'naneial statements requires management to make judgements. e51imales and assumptions that affect the amounts reported. The estimates and associated assumptions are based on historical experience and other factors th8t are considered to be relevant. This includes.. Depreciation - Depreciation is calculated so as lo write off the cost of an asset. 5S its residual value. over the economic life ol that asset. An estimate of the useful lrfe of assets is detsiled in the depreciation accounting wlicy. The value of depreciation charged during the ye8r was £4,065. Income and ondowments All income is recognised once the chanty has entitlement lo the income. il is probable Ihal the income will be received 8nd the amount of the income receivable can be measured reliably. Grants receivable Income from government and other grants. whether 'capital' grants or 'revenue' grants. is recognised when the charity has entitlement to Ihe funds. any perfomiance condib.ons attached lo the grants have been mel. it is probable that the income WAII be received and the amount can be measured reliably and is not deferred. Other income Other income, including the hire of facilities. is re(x)gnised in the txriod in which tt is re[Vable and lo the exlenl the gocKls have been provided or on compleb'on of the service. Expenditure All expenditure is recognised once there is a legal or construdive obligalh)n to that expenditure, it is probable settiemenl is required and the amourbl can be measured reliabty. All costs are allocated to the applicable expenditure heading that aggregate similar costs lo Ihal category. Where St$ cannot be direcuy attributed to particular headings they have been allocated on a basis consistent with the use of resources, with central staff costs allocated on the baS of time spent. and depreciation charges allocated on the portion of the asset's use. Other supp(KL costs are allocated based on th8 spread of staff costs. Raising funds These are costs incurred in attr8Cting voluntary income. the management of investments and those incurred in trading activities that raise funds. Charitable activities Charitable expenditure comprises those costs incurred by the charity in the delivery of ils activities and services for Ils beneficiaries. 11 includes both Costs that can be alkKated directty to such ath'vilies and those costs of an indirect nature necessary to support them. Taxatlon The charity is considered lo pass the tests set out in Paragraph 1 Schedule 6 of the Finance Act 2010 and therefore it meets the definition of a charitable company for UK corporation tax purposes. Accordingly, the charity is potentially exempl from taxation in respect of income or capital gains reiVed within categories covered by Chapter 3 Part 11 of the Corporation Tax Ad 2010 or Section 256 of the Taxation of Chargeable Gains Acl 1992. to the extent that such income or gains are applied exclusively to charitable purposes. 13

Park View Community Centre Notes to the Financial Statements for the Year Ended 31 August 2022 Tanglble flxed assets Individual fixed assets costing £100 or more a inrtially recorded al cost. less any subsequent accumulated depreciation and subsequent accumulated impaimient losses. Depreciation and amortisation Depreciation is provided on tsngible fixed assets so as to write off the cost or valuation. less any estimated residual value. over their expected useful economic life as follows.. Asset class Long leasehold Fixtures and fitb'ngs Sports equipment Impaimient of flxed assets A review for impairment of a fixed asset is carried out rf events or changes in Circumstances indicate that the carrying value of any fixed asset may not be recoverab. Shortfalls between the carrwng value of fixed assets and their recoverable amounts are recognised as impaim)enls. Impairment losses are recognised in the Statement of financial acbviknes. Deprgciation method and rate 25% on cost and 10% on cost 25Y• on cost 10% on cost Stock Stock is valued at the h)wef of cost and estimated selling prtce less CA)Sts lo complete and sell, after due regard for obsolete and slow mowng sto¢ks. Cost is delemined using the firsl-in, firStUl IFIFOI basis. Trade debtors Trade debtors are amounts due from ujstomets for merchandise sold or services performed in the ordinary course of business. Trade debtors are recognised initially at the transaction price. They are subsequently measured 81 amortised cost using the effective inleresl method, less provision for impairment. A provision for the impairment of trade debtors is established when there is objective evidence that the charity will not be able lo collect all arnounls due according lo the original terms of the r1VableS. Cash and cash equlvalents Cash and cash equivalents comprise cash on hand and call deposits, and other short-lemi high liquid investments that are readily convertible to a known amount of cash and are subject lo an insignificant risk of change in value. Trade credltors Trade creditors are OblallonS to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the charity does not have an unconditional right, at the end of the reporting period. lo defer settlement of the creditor for at least twelve months after the reporting date. If there is an uncondib'onal right lo defer settlement for at least Iwelve months after the reporting date, they a presented as non-current Trade eTeditors are recognised initially al the transaction price and SUbSVentIY measured at amortised cost using the effective interest method. Fund structure Unrestricted income funds are gener81 funds that are availab for use at the trustees, discretion in furtherance of the obieclNes of th8 chaTtty. 14

Park View Community Centre Notes to the Financial Statements for the Year Ended 31 August 2022 Reslricled income funds are those donated for use in a paCUlar area or for specific purposes, the use of which is restricted lo that area or purpose. Pensions and other post retirement obligations The charitable company operates a defined contribution pension scheme. Contributions payable to the charitable company's pension scheme are chafged lo the Statement of Financial Activities in the period lo which they relate. Redundancy payments The ¢harily shall recognise redundancy payments as a liability and an expense onty when the charity is demonstrably committed either.. lal to terminate the employment of an employee or group of empk)yees before the nomial retirement date,. or Ibl to provide temiination benefrts as a result of an offer made in order to encourage voluntary redundancy. 3 Income from charitable activltles Unrestridgd Total 2022 Total 2021 General Restricted Grants Other activities 5,667 5.667 96.624 28.918 82,849 96.624 96,624 5,667 102.291 111.767 Total for 2021 102,407 9.360 111.767 2022 2021 Classes - Grants Other activities - Hire of faciltties Other a¢livities - Casual use of facilities 5.667 93,304 3,320 28,918 70,399 12,450 102,291 111,767 Grants received, included in the ats)ve. are as folbws.. 2022 2021 Durham County Council Sports England HMRC - Furlough 5.667 9.360 19,558 5.667 28,918 15

Park View Community Centre Notes to the Financial Statements for the Year Ended 31 August 2022 4 Income from other trading actlvltles Unrestrleted Totsl 2022 Total 2021 General Cafe Other events income Cafeteria income 4,441 552 69 4.441 552 69 960 5.062 5,062 960 All other trading income in the current and prior year are unrestricted funds. 5 Expenditure on raising funds al Costs of trading activities Unrestricted funds General R&strictgd funds Total 2022 Total 2021 Note Costs of goods sold 5,213 5.213 Total for 2022 5.213 5,213 6 Expendlture on charitable adivities Adivity undertaken directly Activity support osts 2022 2021 Classes & other activities Governance 35.964 78.088 14.517 114,052 14.517 97,383 14.123 35.964 92,605 128,569 111.506 £112,752 12021 £106.6361 of the above expenditure was attribLrtable to unrestricted funds and £15,81712021- £4.8701 lo restricted funds. In addition lo the expenditure analysed above, there are also governance costs of £14.517 12021 £14.1231 which relate direcuy to charitable aclivitses. See note 7 for further details. 16

Park View Community Centre Notes to the Financial Statements for the Year Ended 31 August 2022 7 Analysls of support costs Raising funds expenditure Governance costs Unrgstricted Total 2022 Total 2021 General Audit fees Audit fees and other fees Other Professional Services 3.514 11,003 3.514 11.003 4,250 9,873 14,517 14,517 14,123 8 Net incomingloutgoing resources Nel loulgoing)fincoming resources for the year indude.. 2022 2021 Audit fees Depreciation of fixed assels 3.514 4,065 4.250 5,503 9 Trustees rgmuneration and expenses No trustees, nor any persons connected wth them. have received any remuneration from the charity during the year. No Irusl8es have received any reimbursed expenses or any other benefits from the charity during the year. 10 Staff costs The a99regate payToII costs were as folk)ws'. 2022 2021 Staff costs during the year were: Wages and salaries Social security costs Pension costs 35.269 415 52.616 1,765 551 35,868 54,932 17

Park View Community Centre Notes to the Financial Statements for the Year Ended 31 August 2022 The monthly average numbar of persons (including senior management team} employed by the charity during the year was as fdlows.. 2022 No 2021 No Teaching staff Administration staff Management staff No employee received emolurnenls of more than £60.000 during the year. The total employee benefits of the key management personnel of the charity were £Nil {2021- £Nill. 11 Taxatlon The charity is exempl from taxation in respect of income or capital gains received within tegOrieS covered by Chapter 3 Part 11 of the Corporation Tax Act 2010 or Section 256 of the Taxation of Chargeable Gains Act 1992. to the exlenl that suth income or gains are applied exclusively lo charitable purposes. 12 Tangible fixed assets Land and buildings Furniture and equipment Sports equipment Totsl Cost Al 1 September 2021 Disposals 22.643 7.739 53,356 33.966 83,738 33,966 Al 31 August 2022 22.643 7.739 19.390 49.772 DeprlatIon At 1 September 2021 Charge for the year Eliminated on disposals 22.643 7,552 145 21.016 3.920 19,916 51.211 4,065 19.916 At 31 August 2022 22.643 7.697 5.020 35.360 Net book value Al 31 August 2022 Al 31 August 2021 42 14.370 14.412 187 32.340 32.527 13 Stock 2022 2021 Stocks 50 18

Park View Community Centre Notes to the Financial Statements for the Year Ended 31 August 2022 14 Debtors 2022 2021 Trade debtors Due from group undertakings Prepayments and accrued income 11.374 17,012 6.300 2,654 499 11,873 25,966 15 Creditors: amounts falling due wlthln one year 2022 2021 Trade credrtors Due to group undertakings Other Creditors Accruals 26 48,000 372 1.131 1,622 371 6,680 49.529 8,673 16 Obllgatlons under leases and hire purchase contracts The total value of future minimum lease payments was as follows= 2022 Within one year 48.000 17 Pension and other schomes Defined contribution pension $¢heme The charity operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the charity to the scheme and amounted lo £551 12020- £7141. 19

Park View Community Centre Notes to the Financial Statements for the Year Ended 31 August 2022 18 Funds Balancg at 1 September 2021 Incomlng resources ResoUe$ expended Balanee at 31 August 2022 Unrgstricted funds General General fund 35.128 101.686 1117,965) 18,849 Rgstricted funds Improwng fitness Sport England grant Big k)ttery grant DCC grant- IramFioline DCC grant 5,249 7.320 8.417 3.631 {1.0861 {7,3201 (1,2381 1506) 5.667 4,163 7,179 3.125 5,667 Totsl rostrlctsd funds 24.617 5,667 {15,817 14.467 Total funds 59.745 107.353 {133.782 33,316 The specific purposes for which the funds are to be applied are as follows.. 'Big Lottery, is funding for sports equipment. 'Improving Fitness Park View Community Centre, is funding for the development of community based exercise programmes for all ages and abilities. 'Durharn County Counal Fixed Asset Fund. is funding for Ihe purchase of a new trampoline. 'Sports England granl, is funding for CrossFit Teens project.

Park View Community Centre Notes to the Financial Statements for the Year Ended 31 August 2022 19 Analysis of nat assats between funds Unrestricted Total funds at 31 March 2022 General Restricted Tangible fixed assets Nel current asselsllliabilitiesl 1,383 17,466 13.029 1.438 14.412 18.904 Total nel assets 18,849 14.467 33.316 Unrestricted Total funds at 31 August 2021 Ganeral Restricted Tangible fixed assets Net current asselsl{liabililiesl 7,910 27,218 24,617 32,527 27,218 Total net assets 35.128 24.617 59,745 20 Rglaled party Iran$a¢tions During the year the Charity made the following related party transactions= Park View Academy Trust 11000/4 parent enlily of Park View Community Centre.) Rental charges of £48,000 {2021 £28,692) and purchase recharges of £NIL {2021 £32.4071 were made by the Charity from Park View Academy Trust. Income of £11.73212021.. £nill was received.Al th8 balance sheel dale the amount due to Parf( View Academy Trust was £48.00012021- £6.300 due from). 21 Parent and ultimate parent undertaking The ultimate parent is Park View Academy. incorporaled in England and Wales. These financial statements are available upon request from Church Chare, Chester Le Street, County Durham, DH3 3QA. The principal activity ol the company is lo provide education. 21

Park View Community Centre Audit Highlights Memorandum for the year ended 31 August 2022 23 November 2022

Contents	Section No.
Executive Summary	01
Summary of Audit Findings	02
Other Matters	03
Internal Control Observations	04
Appendices	Appendix No.
Adjusted Journals & Surplus Reconciliation	1a & 1b
Unadjusted Journals	02
Previous Period Internal Control Observations	03
Sector News & Highlights

This report is provided on the basis that it is for the information for the Board of Trustees only and that it will not be quoted from or referred to, in whole or in part, for any other purpose without our prior written consent. No responsibility is assumed by us to any other person who may choose to rely on it for his or her own purposes.

AJ AZETS Executive summary vv vv

Executive summary

AUDIT OBJECTIVE

The objective of the statutory audit is to enable us to give an opinion as to whether the financial statements show a true and fair view of the results for the period (and that they are in compliance with the necessary reporting standards). We utilise audit tests on a sample basis to provide assurance that the financial statements are free from material error.

INDEPENDENCE

We considered our independence during the audit planning and continued to assess this throughout our work. We can confirm that there have been no changes or further threats identified (to our independence) arising during the audit.

It is the Trustees’ responsibility to take necessary steps to ensure that they are aware of all information relevant to the audit and that this has been

communicated to us as the auditors. The points we make in this report are matters we felt would be useful to bring to your attention, rather than a comprehensive review of the Charity and its results.

It is also the responsibility of the Trustees to ensure , as far as possible, that accurate and reliable accounting records are maintained and that the Charity has sufficient policies and procedures in place to prevent and detect fraud and error .

Executive summary

INTRODUCTION

Our audit work has been carried out in accordance with our audit plan communicated to you at the commencement of the audit.

The purpose of this report is to:

summarise our findings in respect of the audit for the year ended 31 August 2022 and to bring to the attention of the Trustees significant points identified during the audit and to confirm how these were resolved; and
promote effective two-way communication between you and us.

STATUS OF THE AUDIT

We have substantially completed our audit of the financial statements of the Charity.

OUR AUDIT REPORT

Subject to satisfactory completion of the outstanding items, we do not expect to make any modifications to our audit report. However our responsibilities in respect of the audit report extend up to the date it is signed. We will advise you of any changes to this position, if necessary.

MATERIALITY

We planned our procedures using a materiality of £3,200 and performance materiality of £2,400 and have not been required to make adjustments to these.

The threshold for reporting audit differences to you is set at 5% of the materiality figure, which is £160. We would also report to you errors below this threshold if we considered there to be a systemic issue.

The basis of our assessment of materiality has remained consistent with the audit planning memorandum.

ADJUSTED JOURNALS

We have discussed with management and asked them to correct certain misstatements we identified in the financial statements.

We attach a schedule (Appendix 1) that records the adjusting journals which have been agreed with you.

UNADJUSTED JOURNALS

There were no unadjusted journals identified during the audit.

Executive summary

OTHER MATTERS FOR FURTHER DISCUSSION

Section 3 includes other matters which we have highlighted from our audit work.

CONTROL RECOMMENDATIONS

We have identified a small number of performance improvement observations – details of which are shown at Section 4.

In summary there were 0 red issues, 0 amber and 0 green comments raised in the current period.

In respect of prior years there are no issues still outstanding.

MANAGEMENT REPRESENTATIONS

Auditors normally seek a number of ‘management representations’ from the Board, which confirm a number of points that we have relied upon in undertaking the audit and in reaching our conclusions. Please ensure that the Management Representation Letter is read and approved prior to signing.

We would seek to draw your attention to the non-standard representations in this letter which are as follows:

We confirm that the allocation of income and expenditure between funds is correct.

POST BALANCE SHEET INFORMATION & GOING CONCERN

It is the Trustees’ responsibility to;

Make the auditor aware of any events occurring after the period end (and prior to signing) which could impact on the financial statements.

Consider ‘Going Concern’ (as the basis for preparation of the financial statements) for a period of at least 12 months from approving the financial statements. If there are any uncertainties then the Trustees are required to disclose these within the financial statements. Auditors are required to assess the Board’s conclusions about Going Concern. Prior to completion we will request up to date management information, together with a cash-flow forecast (from those latest management accounts along with any further information the Board have considered in relation to Going Concern).

AJ AZETS Summary of Audit Findings vv vv

Summary of Audit Findings

AUDIT RISKS IDENTIFIED AT THE AUDIT PLANNING STAGE

At the planning stage of the audit we identified a number of audit risks where we considered the focus of our work would be aimed. Our responses and conclusions in respect of these are documented below.

Management override of controls and income recognition are included below as there is a presumption within International Standards on Auditing (UK) for all audits that these are significant risks. We also include related parties and restricted funds for charity audits as we consider these are also ‘significant’ risks.

Significant audit risks	Responses and conclusions
Risk of fraud in revenue recognition	Audit Procedures:
There is a risk that revenue	Audit testing was performed on a sample of income to ensure that income recognised in the financial statements
recognition is materially misstated due	is consistent with supporting documentation. Cut-off was considered and tests were also performed on accrued
to fraud and completeness of income	and deferred income to ensure that this met the SORP criteria.
	Conclusion:
	No material issues were identified following completion of our work.
Allocation of funds	Audit Procedures:
There is a risk that funds are not	We have reviewed income streams and confirmed those that are restricted. We have also ensured that the
correctly stated and that the income	expenditure allocated against them has been done so in accordance with donor requirements.
and expenditure is incorrectly
allocated within restricted funds.	Conclusion:
	We can confirm that the allocation of income and expenditure between funds appears accurate.

Summary of Audit Findings

AUDIT RISKS IDENTIFIED AT THE AUDIT PLANNING STAGE AND THE CONCLUSIONS THEREON

Significant audit risks	Responses and conclusions
Management override of controls	Management override of controls
There is a risk that management are in	There is a risk that management are in a position to override controls
a position to override controls
	Conclusion:
	No material issues were identified following completion of our work.
Related parties	Audit Procedures:
There is a risk that related party	During the audit planning process we established and confirmed with you the identified related parties and
transactions are not identified nor	received confirmation that no additional related parties existed. During the audit we have reviewed for activity
disclosed within the financial	with the named related parties.
statements.
	Conclusion:
	We have checked and confirmed the related party transactions and ensured adequate disclosure within the
	accounts.

AJ AZETS Other matters vv vv

Other matters

OTHER MATTERS TO DRAW TO YOUR ATTENTION

During the course of our audit we have identified the following issues which we would like to bring to your attention;

There are no such matters to draw to your attention.

SIGNIFICANT DIFFICULTIES ENCOUNTERED DURING THE AUDIT

There were no significant difficulties encountered during the audit which we need to report to you.

All relevant representations which we have asked you to confirm are included in the letter of representation.

AJ AZETS Internal control observations vv vv

Internal control observations

METHOD

As part of the audit process, we consider the overall control environment and key controls (relevant to the audit) that are observed or tested as part of the audit. During the audit, where we identify areas where the internal controls required to be strengthened, we would categorised observations as follows:

Status	Classification
Red	Fundamental issues which are significant and
	require urgent attention
Amber	Significant matters which are less urgent but still
	require reasonably prompt action
Green	These observations merit attention within an
	agreed timescale

FINDINGS

We did not note any internal control observations in the current period.

The audit does not involve a comprehensive review of all controls operating within the Charity and as such, the following comments should not be assumed to be a complete statement of all weaknesses that may exist in the Charity’s control environment or within the detailed systems of internal control.

TRUSTEES’ RESPONSIBILITIES:

Having delegated the day-to-day control to a management team, the Trustees must ensure that the organisation has systems and controls in place that are suitably strong to enable the delegation to take place, and that they must seek to test the implementation of controls sufficiently regularly.

We would respectively reiterate the point that, it is the Trustees’ responsibility to ensure that systems, controls, practices and procedures are suitable for the organisation.

Whilst these points are based on observations noted by our team during the audit fieldwork, they are merely recommendations for discussion with you. As recommendations they are therefore not a criticism of your current procedures.

AJ AZETS Appendices vv vv

Appendix 1a – Adjusted journals

----- Start of picture text -----
Debit/(credit) Debit/(credit)
£ £
Creditors 48,000
Being reallocation of intercompany creditor
Intercompany creditor (48,000)
TOTAL 0 0
----- End of picture text -----

Appendix 1b – Reconciliation of result

----- Start of picture text -----
Surplus/(Deficit)
£
Draft result per client -£ 26,429
Agreed Adjustments £ -
Adjusted Surplus/(Deficit) per accounts -£ 26,429
----- End of picture text -----

Appendix 2 – Unadjusted journals

There were no unadjusted errors identified during the audit.

AJ AZETS Sector News & Highlights vv vv

Sector News & Highlights

CHARITY COMMISSION PUBLICATIONS

The Charity Commission have a number of useful publications (‘CC’ numbered guides) and continue to update them regularly.

We recommend that trustees regularly visit the Charity Commission website or subscribe to their news feed for continued guidance.

https://www.gov.uk/government/organisations/charity-commission/about/publicationscheme

Sector News & Highlights

AUTOMATIC ENROLMENT PENSIONS AND OPPORTUNITIES TO SAVE

As of April 2019 the Employee and Employer contribution rates for Auto Enrolment pensions increased – but there have been no announcements about future increases at this stage.

From	EmployER	EmployEE	Total
	Contribution	Contribution
April 2017	1%	1%	2%
April 2018	2%	3%	5%
April 2019	3%	5%	8%
April 2020	3%	5%	8%
April 2021	3%	5%	8%
April 2022	3%	5%	8%

NATIONAL

As of April 2019 the Employee and Employer contribution rates for Auto Enrolment pensions increased – but there have been no announcements about future increases at this stage.

Year	25+	21-24	18-20	<18	Apprentice
2017	£7.50	£7.05	£5.60	£4.05	£3.50
2018	£7.83	£7.38	£5.90	£4.20	£3.70
2019	£8.21	£7.70	£6.15	£4.35	£3.90
2020	£8.72	£8.20	£6.45	£4.55	£4.15
	23+	21-22
2021	£8.91	£8.36	£6.56	£4.62	£4.30
2022	£9.50	£9.18	£6.83	£4.81	£4.81
% Inc	6.6%	9.8%	4.1%	4.1%

DID YOU KNOW YOU COULD SAVE COSTS?

As costs of employment continue to increase, you can use salary sacrifice arrangements to lower employment costs. If you do not already do so, please talk to us about how this can help your organisation to lower its employment costs. We have helped lots of other organisations do this, so ensure that you are also operating from the same lower cost basis as your peer and competitor organisations – we will be able to assist you.

Remember that there have been a number of rulings which have impacted employment costs, including:

Travel time between work locations is counted for the purpose of assessing NMW.
Where staff are required to be on standby and at or near the workplace, they are entitled to be paid for this time, including sleep overs.
Regular overtime is now counted towards holiday pay calculations

Sector News & Highlights

NON-PRIMARY PURPOSE TRADING LIMITED

All charities have an exemption from paying Corporation Tax. If you imagine that there is a ‘bubble’ protecting the organisation from being subject to tax, this bubble remains intact unless you start to carry out ‘trading activities’.

When the charity undertakes activities in line with its ‘Aims and Objectives’, then the charity is not ‘trading’. However charities often, in looking to diversify their income, carry out activities beyond their immediate aims and objectives. If this activity is diverse from the charity’s main activities, then it is known as ‘Non-Primary Purpose’ trading (‘NPP’).

Charities can undertake NPP trading activities, although beyond certain limits, the entire profits of that activity can be subject to Corporation Tax i.e. the ‘bubble’ can be removed, exposing those trading profits to be taxed (which is why HMRC often request a return is filed every few years).

Exemption:

NPP trading is exempt if it is <25% of total income (or if the charity’s total income is greater than £320,000 then the maximum exemption for NPP income is limited to £80,000)

If the charity’s NPP trading income is greater than 25% (or £80,000) of income, then the ‘profits’ of the whole of the NPP trading income is subject to tax (not just the excess over the exemption). A trading subsidiary is a way to prevent any NPP trading income beyond those limits from becoming taxable.

If your charity currently carries out activities which are not directly related to its main aims and objectives, then continue to monitor income levels against exemption limits. Or if you are appraising new strategic options / income opportunities, ensure that trading considerations are factored into your deliberations. We can discuss any concerns you have and assist you to structure any planned trading activities effectively.

Sector News & Highlights

TRUSTEES’ REPORT – POINTS TO CONSIDER WHEN DRAFTING

‘Large’ charities (those over £500k income) are required to provide additional information in their report.

Structure, Governance & Management – Set out the charity’s organisational structure (and those of trading companies); how decisions are made; policies and procedures for trustee induction & training; arrangements for setting remuneration of Key Management Personnel with benchmarks and parameters for setting their pay; and, relationships with related parties and any other organisations with which it pursues its objectives.

CC20 Guidance advises that large charities should comply with the Code of Fund Raising Practice. Where a charity has chosen not to comply with the Fundraising Regulator’s scheme of regulation (if you fund raise), then you must explain why within the Trustees Annual Report (TAR).

Plans for Future Periods – Provide a summary of the future plans, including the aims, objectives and details to achieve them.

Objectives & Activities – Give more detail about how the aims and objectives have been achieved; about the short-term and longer-term objectives, including strategies for achieving these; the criteria for measuring success; and, the significant activities undertaken.

Achievements & Performance – Describe the significant charitable activities undertaken, set against the objectives; the performance of material fundraising activities against objectives set; investment performance; and, any material expenditure incurred to raise future income. Link the numbers in the accounts to your actual activities and bring them to life! Ensure that you cover Public Benefit.

Financial Review – Give details on significant events; and, the principal risks and uncertainties facing the charity and a summary of the plans and strategies for managing those risks. Where investments are held, the investment policy and objectives set. Defining the charity’s reserve policy and stating free reserves.

Fundraising - The charity’s approach to fundraising activity (as set out in Charity Commission CC20); Whether a professional fundraiser was used; Details of any voluntary fundraising scheme or standards the charity has signed up for; Any failures cited; How the charity monitored fundraising activities are were carried out; If any complaints have been received about its fundraising; and, What the charity has done to protect vulnerable people from unreasonable intrusion on a person’s privacy.

Sector News & Highlights

INDIRECT TAX – VAT

Whilst there is a ‘trading exemption’ available to charities in terms of corporation tax, there is no such exemption from charities needing to consider VAT.

REVIEWING YOUR INCOME STREAMS

Charities often have multiple income streams, which may be outside the scope of VAT, or maybe within the scope of VAT and be ‘taxable’ or be ‘exempt’. Therefore it is vital that you continue to assess and appraise all income streams (and particularly any new sources that arise) in the year. If an income stream falls under ‘business’ and attracts VAT (i.e. is ‘taxable’), then where all taxable income is greater than the VAT threshold then the charity MUST register for VAT.

We have included some further information on VAT in the Appendix (see back pages)

----- Start of picture text -----
Business Non-Business
Taxable Exempt e.g. Grants /
Watch (e.g. Service (e.g. Service Donations –Legacies /
out for Level Level
voluntary
Agreements) Agreements) income
0% Health Care /
5% 20% Welfare Service
Zero Rated (inc / Education /
all donated Reduced Rated Standard Rated Cultural
goods) Exemption
----- End of picture text -----

There are reliefs available to charities – but there is NO blanket exemption which stops charities needing to consider VAT. If you would like the comfort of our VAT healthcheck, then please speak to us about taking this forward.

Sector News & Highlights

CHARITY RESERVES – BUILDING FINANCIAL RESILIENCE

What is the definition of Free Reserves?

Unrestricted funds that are freely available (so not designated against planned future expenditure, not restricted and not funds held as fixed assets) – therefore Free Reserves are effectively the Current Assets of the charity excluding those which relate to restricted funds.

Developing a reserves policy:

The reserves policy should aim to provide accountability, express confidence in times of uncertainty, display sustainability in a charity’s objects, while evidencing the trustees’ management skills and understanding of a charity’s strategy and budget. In setting the policy, (CC19) guidance indicates that the following steps should be considered to ensure that the policy is appropriate for the charity in question:

Understanding the nature of charitable funds held and identifying the functional assets of the charity
Understanding the financial impact of risk, including reviewing future sources of income and the impact of future plans/commitments
Consider what level of reserves would impact negatively on attracting donors (holding too much/too little)
Agreeing a Reserves policy, specifically the amount of reserves to be held and how/why this has been determined.
Compare actual level of free reserves to the amount identified in the policy and explaining any variances.

What level of reserves should our charity hold?

Each charity must consider its own position, be aware of threats and opportunities ahead, and create a reserves policy that is both resilient and open to flexibility on its way towards achieving its objectives.

Sector News & Highlights

IS YOUR CHARITY ‘LARGE’?

Larger charitable companies will need to include extra details about their activities in their annual accounts (further details are available in SORP Information Sheet Three).

Income	Gross Assets	No. of Employees
£36m	£18m	250

Requirement A – Directors’ duties to promote the charity’s purpose

For charities meeting one of the three size criteria, directors must act to promote the charity’s purpose and their duties should be modified to reflect this.

A reporting statement must be published on the charity’s own website and it must be included in the Trustees Annual Report.

It is no enough for charities to only publish their annual report on a regulator or registrar’s website.

Requirement B – Employee engagement

There are three new accounting requirements, of which two apply to charities with over £36m in gross annual income, gross assets over £18m or more than 250 employees.

The other applies simply to charities with more than 250 employees.

For charities with over 250 staff, asks for a statement on how directors have engaged with employees. The information sheet says this could also apply to volunteers.

Charities should also consider employees' reward or incentive schemes within the reporting statement.

Requirement C – Stakeholder engagement

The final reporting requirement asks for a statement on how directors have engaged with stakeholders and gives service users, beneficiaries, funders and the wider community as examples.

Requirement C applies to charities that meet one of the three size criteria.

Sector News & Highlights

IS YOUR CHARITY ‘LARGE’?

Larger charitable companies will need to comply with and publish their Streamlined Energy and Carbon Reporting (SECR)

Income	Gross Assets	No. of Employees
£36m	£18m	250

Large companies, as defined in sections 465 and 466 of the Companies Act 2006, are companies that meet two or more of the above criteria.

The regulations require large unquoted companies that have consumed (in the UK), more than 40,000 kilowatt-hours (kWh) of energy in the reporting period to include energy and carbon information within their directors' (trustees') report.

Where a large company does NOT consume more than 40,000 kWh of energy in a reporting period, it qualifies as a low energy user and is exempt from reporting under these regulations. A statement to this effect should be included in the Trustees’ Report.

What does a charity need to disclose?

A charity that meets the thresholds must publish, as a minimum:

its annual UK energy use (in kWh), as a minimum relating to gas, purchased electricity and transport fuel and associated greenhouse gas emissions (in tonnes of carbon dioxide equivalent (CO2e))

an emissions intensity ratio chosen by the charity. Intensity ratios compare emissions data with an appropriate business metric or financial indicator, such as pupil numbers, to allow comparison over time or with other organisations

the methodologies used to calculate the required information
a narrative of measures taken to improve energy efficiency in the period of the report. If no measures have been taken, this should be stated,
In future years, the prior year equivalent figures are also required to be disclosed for comparison, but this is not mandatory in the first year (y/e 31/3/20).

Subsidiaries - If a charity is reporting at group level, it must include energy and carbon disclosures of any subsidiaries included in the consolidation, unless the subsidiary would not itself be obliged to include the information if reporting on its own account.

More information is available at;

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachm ent_data/file/850130/Env-reporting-guidance_inc_SECR_31March.pdf

AJ AZETS Sector News & Highlights - Appendix vv vv

Sector News & Highlights – Appendix

INDIRECT TAX – VAT

Some further details in respect of VAT registration requirements, recovery requirements, reliefs and Making Tax Digital (MTD).

VAT registration	A charity is required to register for VAT when the value of its taxable supplies (standard-rated, reduced-rated and zero-
	rated supplies) exceeds the UK VAT registration threshold (currently £85,000). VAT registration is compulsory if (i) at the
	end of any month, the value of the taxable supplies made in the previous 12 months or less have exceeded the VAT
	registration threshold or (ii) at any time, if the charity expects the value of taxable supplies made in the next 30 days alone
	will exceed the VAT registration threshold.
	Once VAT registered, a charity will be required to submit quarterly VAT returns and account for VAT at the appropriate rate
	on taxable supplies made. It will also be entitled to recover VAT incurred on costs directly attributable to taxable business
	supplies it makes.
Determining VAT recovery	Registering for VAT does not necessarily mean that a charity can recover all of the VAT it incurs on expenditure. VAT is
	only recoverable to the extent that the VAT incurred relates to the making of taxable supplies, or intended taxable supplies,
	made in the course of furtherance of a business (i.e.
	supplies which are subject to VAT at the 20%, 5% or 0% rates). VAT incurred which relates to exempt supplies, or
	intended exempt supplies, is irrecoverable (subject to de minimis limits).
	VAT incurred which relates to non-business supplies, or intended non-business supplies, is generally irrecoverable subject
	to some limited exceptions and. Where VAT is incurred on purchases that relate to both non-business and taxable
	business activities, charities can only recover the VAT incurred to the extent that the purchases are used to make taxable
	business supplies i.e. the charity can only reclaim VAT on the proportion of the costs that are used for taxable business
	purposes.
	Calculating how much VAT is recoverable in these circumstances is a two-stage process and can often be complex.
	• Stage 1- Business/Non-business apportionment
	• Stage 2- Taxable/Exempt apportionment (“Partial Exemption” calculation)
	Should you require any assistance in reviewing the appropriateness of the charity’s business/non-business and partial
	exemption methodology used to determine VAT recovery, please contact us.

Sector News & Highlights – Appendix

Zero-rated reliefs

Advertising - a charity should be entitled to obtain qualifying supplies of advertising services, including staff recruitment, at the zero rate. It is HMRC’s view that digital advertising on social media and subscription websites is ‘targeted’ at selected individuals or groups because providers/ sites use tools to apply advertisements to them when they are signed in. The content will be related to the individual’s known likes, dislikes, interests or location, as a signed in member of the website. Where an advert is targeted in this way, it does not meet the conditions for the charity advertising relief, as it is not being communicated to the general public and is therefore a standard-rated marketing service when provided by a UK supplier. As social media suppliers are mainly based overseas, it also means that VAT must be accounted for under the reverse charge by charities receiving targeted advertising services from these suppliers, and in many cases this will represent a significant cost.
Goods connected with donations - a charity can buy pre-printed collecting boxes, envelopes and appeal letters together with low-cost lapel stickers, emblems and badges that it gives in acknowledgement of a donation, at the zero-rate. Where a printer produces a package of printed material for a charity, some of which is zero-rated and some of which is standard-rated, the printer may be able to zero rate the entire package, subject to relevant conditions being met.
Aids for the disabled - supplies to charities of certain goods and services which the charities make available to disabled people for their personal or domestic use are zero-rated.
Drugs and chemicals – certain substances bought by a charity engaged in medical or veterinary research, which will be used directly for testing, or for mixing with other substances in the course of that research, are zero rated.
Equipment for producing ‘talking’ books and newspapers - purchases of sound recording and reproduction equipment (or parts and accessories for such equipment) that has been designed or specially adapted for recording or reproducing speech on magnetic tapes for the benefit of blind and severely visually impaired people, can be purchased at the zero rate by charities providing talking books or newspapers for these people.

Sector News & Highlights – Appendix

Zero-rated reliefs	•	Lifeboats, slipways and launching and recovery equipment - charities providing rescue or assistance at sea can buy
		certain qualifying goods and services at the zero rate.
	•	Medical and scientific equipment – charities who buy certain qualifying goods which they will donate to an eligible body
		(e.g. a UK health authority, a hospital, a research institution or certain other charitable institutions), can purchase the
		goods at the zero-rate.
	•	Medicinal products - a charity engaged in the treatment or care of people or animals, or in medical or veterinary
		research, can buy medicinal products at the zero rate.
	•	Rescue equipment - charities providing first aid or rescue can buy specialist communication, light enhancing and heat
		detecting equipment at the zero rate.
	•	Resuscitation training models - the supply to a charity of a resuscitation training model that is to be used in first-aid
		training in cardiopulmonary resuscitation or defibrillation techniques is zero-rated.
	The availability of the above zero-rating reliefs is subject to all of their respective relevant conditions being met. Should you
	require any assistance in reviewing the application of the zero rate to supplies received by the charity, please contact us.
Reduced-rated reliefs	If supplies of fuel and power made to the charity is used 60% or more for non-business use, it should be entitled to receive
	all of the supply at the reduced rate of VAT (5%).
	Should you require any assistance in reviewing whether the above reliefs are available to the charity, please contact us.

Sector News & Highlights – Appendix

Capital projects, property projects and the introduction of the construction industry domestic reverse charge (“DRC”) with effect from 1 March 2021

Any capital projects e.g. new builds, property extensions and property refurbishments/redevelopments should be carefully considered from a VAT perspective to ensure (i) the correct rate of VAT is applied to the works and any available zerorating relief is maximised where the relevant conditions are met for the building to qualify as a “relevant charitable purpose” building for VAT purposes; and (ii) the VAT recovery position of any VAT incurred on the works is understood, based on its intended use.

Where a charity has secured zero rating for a building on the basis that it will be used as a “relevant charitable purpose” building for VAT purposes, it will be required to monitor the use of that property over a ten-year period. Where the use of the property changes, such that it no longer meets the conditions of a “relevant charitable purpose” building, there is a risk that a deemed supply and a VAT liability will arise.

Where a charity undertakes works that constitute a “capital item” for the purpose of the VAT Capital Goods Scheme, the use of the asset is required to be monitored over a ten-year period and an appropriate adjustment included in the charity’s VAT return on annual basis to reflect any change in taxable use.

With effect from 1 March 2021 the VAT DRC must be used for supplies of construction services within the scope of CIS which are subject to VAT at 20% or 5%, where they are made between VAT registered and CIS registered businesses. The DRC is not applicable to supplies of construction services that qualify for zero rating. Where a charity is receiving construction services due consideration should be given to its obligations under the DRC rules. We would however generally expect a charity to be classified as an “End User” for the purposes of the DRC legislation (i.e. it will not make any onward supply of construction services), such that normal VAT rules should apply.

	which are subject to VAT at 20% or 5%, where they are made between VAT registered and CIS registered businesses. The DRC is not applicable to supplies of construction services that qualify for zero rating. Where a charity is receiving construction services due consideration should be given to its obligations under the DRC rules. We would however generally expect a charity to be classified as an “End User” for the purposes of the DRC legislation (i.e. it will not make any onward supply of construction services), such that normal VAT rules should apply.
	Should you require any assistance in reviewing any proposed capital projects, or capital projects completed in the last ten
	years where a potential change of use may have arisen, to ensure the VAT position is fully understood, please contact us.
Structures involving trading subsidiaries	Where a charity’s corporate structure includes a trading subsidiary, care should be taken to understand whether the trading
	subsidiary has an obligation to register for VAT. Furthermore, the VAT treatment and VAT recovery position of any cross
	charges between a charity and a trading subsidiary need to be considered as this may create an additional irrecoverable
	VAT cost. VAT grouping may be a possible way of mitigating an irrecoverable VAT charge however, the most appropriate
	structure for the organisation as a whole should be considered.

Sector News & Highlights – Appendix

Making Tax Digital (“MTD”) requirements with effect from 1 April 2021 and 1 April 2022

For VAT return periods that started on or after 1 April 2021, VAT registered businesses who make taxable supplies above the VAT registration threshold and who submit their VAT returns using MTD need to ensure digital links are in place within their VAT records.

HMRC define a ‘digital link’ as a transfer or exchange of data which is made, or can be made, electronically between software programs, products or applications. Practically this means HMRC requires a digital audit trail starting from your accounting systems all the way through to the figures on your VAT return. Each piece of software must be digitally linked to other pieces of software to create an acceptable audit trail. With effect from 1 April 2022, all VAT registered businesses must sign up to MTD, irrespective of their turnover. Should you require any assistance in ensuring the charity’s VAT return process is MTD compliant, please contact us.

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