Archive for May, 2021

Charity – using a subsidiary trading company

Tuesday, May 4th, 2021

One or more charities can set up a subsidiary trading company to trade on their behalf. This may be a useful strategy if your charity:

  • makes profits on trading that is not linked to its primary purpose
  • makes a profit that comes close to or is higher than the small trading tax exemption limit
  • wants to protect its assets from any trading losses
  • wants to have a separate organisation to carry out all its trading activities

VAT considerations

A charity’s trading company will not have to pay VAT on:

  • profits it makes from donated good sales (as long as it gives these profits to the parent charity)
  • fundraising events it runs for its parent charity

Other types of VAT relief that charities get are not available for their trading subsidiaries.

Trading companies must pay tax and VAT on all their other income and profits in the same way as ordinary limited companies.

A new government-backed loan scheme

Tuesday, May 4th, 2021

A new Recovery Loan Scheme was launched 6 April 2021, to provide much needed liquidity to businesses affected by COVID lockdown measures. Under the scheme, loans of up to £10m are available. The minimum facility sizes vary, starting at £1,000 for asset and invoice finance, and £25,001 for term loans and overdrafts.
Potentially, these loans will be attractive to businesses in retail and hospitality that are gradually being allowed to reopen.
As with the Bounce-Back Loans, the government is providing lenders – the high street banks – with a measure of guarantee to underwrite their risks.
In a recent press release government confirmed:
The scheme, which was announced at budget and runs until 31 December 2021, will be administered by the British Business Bank, with loans available through a diverse network of accredited commercial lenders.
26 lenders have already been accredited for day one of the scheme, with more to come shortly, and the government will provide an 80% guarantee for all loans. Interest rates have been capped at 14.99% and are expected to be much lower than that in the vast majority of cases, and Ministers are urging lenders to ensure they keep rates down to help protect jobs.
The Recovery Loan Scheme can be used as an additional loan on top of support received from the emergency schemes – such as the Bounce Back Loan Scheme and Coronavirus Business Interruption Loan Scheme – put into place last year.
Business owners who are considering a recovery loan should apply the usual considerations. i.e., can they afford the interest and capital repayments.
Please call if you would like help considering your options.

 

Data Protection obligations

Tuesday, May 4th, 2021

Everyone in business that handles personal data must register for data protection purposes with the Information Commissioners Office.

Most business will need to pay an annual fee of £40 or £60 but this can rise to £2,900. Some organisations only pay £40 regardless of their size and turnover. These are: charities and small occupational pension schemes.

If you need to register, there is an online process you can use at https://ico.org.uk/for-organisations/data-protection-fee/self-assessment/.

What is personal data?

Understanding whether you are processing personal data is critical to understanding whether the UK GDPR applies to your activities. Generally speaking, personal data is information that relates to an identified or identifiable individual. The following additional definitions are reproduced from the ICO website:

  • What identifies an individual could be as simple as a name or a number or could include other identifiers such as an IP address or a cookie identifier, or other factors.
  • If it is possible to identify an individual directly from the information you are processing, then that information may be personal data.
  • If you cannot directly identify an individual from that information, then you need to consider whether the individual is still identifiable. You should consider the information you are processing together with all the means reasonably likely to be used by either you or any other person to identify that individual.
  • Even if an individual is identified or identifiable, directly or indirectly, from the data you are processing, it is not personal data unless it ‘relates to’ the individual.
  • When considering whether information ‘relates to’ an individual, you need to consider a range of factors, including the content of the information, the purpose or purposes for which you are processing it and the likely impact or effect of that processing on the individual.
  • It is possible that the same information is personal data for one controller’s purposes but is not personal data for the purposes of another controller.
  • Information which has had identifiers removed or replaced in order to pseudonymise the data is still personal data for the purposes of UK GDPR.
  • Information which is truly anonymous is not covered by the UK GDPR.
  • If information that seems to relate to a particular individual is inaccurate (i.e., it is factually incorrect or is about a different individual), the information is still personal data, as it relates to that individual.

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