The impact of COVID-19 on the charity sector

As the coronavirus continues to affect individuals, companies and charities alike, our specialist EQ Charities team have been supporting our diverse client base with their questions regarding the ongoing crisis.

OSCR has been issuing guidelines which are updated regularly. This information can be viewed here, however, we know that there is no one size fits all approach and we are happy to provide advice on how the guidelines will impact your charity.

We can also assist with applications for Government support including the Third Sector Resilience Fund and the Coronavirus Job Retention Scheme.

The Scottish Council for Voluntary Organisations have set up the Third Sector Resilience Fund specific to charities. This is a £20m emergency fund which can provide grants of between £5,000 and £100,000 for eligible charities that have been affected by the pandemic. There is also an additional £5m being made available through this fund for fully flexible 0% interest loans starting at £50,000. Full details can be found here.

UK workers of any employer who are placed on the Coronavirus Job Retention Scheme can keep their job, with the government paying up to 80% of a worker’s wages, up to a total of £2,500 per worker each month. These will be backdated to 1st March and will be initially open for 3 months, to be extended if necessary. Further clarification on making a claim can be found here.

Some of the other ways in which we can support you include:

• Negotiations with HMRC for time to pay arrangements. We would highlight the HMRC have supported VAT registered charities by deferring VAT payments for 3 months. The deferral period covers VAT payments due for returns within the period 20 March 2020 to 30 June 2020. This is an automatic offer from HMRC and no application will be required however we would stress that direct debits should be cancelled during this time so that payments are not automatically collected by HMRC. The deferred payments are due by 31 March 2021.
• Preparing cashflow projections taking into account government advice, in order to best clarify the current charity position and provide advice for going forward.
• Liaising with lenders to begin negotiations over restructured borrowings
• Discussion with landlords to consider rent deferrals
• Advice over the temporary closure of premises
• Advice over statutory sick pay and the updated government guidelines
• Discussing the impact on charity audits. Each charity is different, and we will contact each charity individually to discuss the best way to comply with audit regulations during this time.
• Considerations over financial statements including extensions to Companies House and Charity Commission deadlines.

Our dedicated EQ Charities team are here to help and reassure you. If you have any questions, or want to discuss your circumstances, please get in touch with the specialist in your area, Mark Gallacher, Susan Beattie, Debbie Millar or Margaret Waite.