Charitable status help

duffs54

Help please, sorry it's a long one:
I work for a friend who has a small org. that takes out vulnerable people with various health problems via the NHS, and also private clients needing help with appts, shopping etc. We do not do Personal care. Now in the first 2 years she didn't have to register for VAT, but last year she had to and her acct choose the flat rate VAT route. Now this isn't a problem with other companies who are rated, but because some of the cutbacks have meant the council have cut back so much some of our NHS clients are being made/asked to open a bank account so that their care plan budget can be paid directly to them, and we invoice them individually, rather than the council. This means they will also have to pay VAT on the invoice, meaning it could be an extra £15-£20 + out of their benefits monies on top of the original bill. These people have various sorts of schizophrenia, bi polar, depression, disabled etc and are not capable of working.

These are vulnerable people who do not understand VAT etc, so might consider not having our services when this rolls out in mid April. In the years that she has been running this org, we have people who would not leave the house, who now do, wouldn't go shopping on their own, cope with life etc. We are saving the NHS a fortune as if they go back into Psychiatric care it will cost £1000. a week to look after them, If they use their own staff to take clients out, they have to pay the Occupational therapists an hourly rate to do this, we are a lot cheaper and do a fantastic job, which is recognised by the Mental health in our area. They are now being signed off from the mental heath unit to save money and instead of being seen monthly by their OT's they will be seen every 6months, so we are their only link back to the Mental health units. We can spot problems they might have before they get worse and have saved people from committing suicide, just beacuase we see them several times a week.and know them well.

My question is, because we do not do personal care she cannot register as a charitable organisation, is there an org that she can join which will give her this status.. A local care service wants us to join with them, which will give us this status, but then when we have been with them they will alter our working ethos and we would have to do personal care, and our wages will drop to the basic wage.

There isn't anyone out there at the moment that does what we do in the area and she wants to remain unique with this. She has lots of people who want to start up this kind of service that contact her for help, so it is a service that is needed.

Any ideas please gratefully received. thanks:)

Savvy_Sue

duffs54 wrote: »

My question is, because we do not do personal care she cannot register as a charitable organisation,

says who?

There are various reasons why registering as a charity may not be an option, or the right thing to do, but I cannot see why 'not doing personal care' would have any bearing on the situation at all!

duffs54 wrote: »

is there an org that she can join which will give her this status..

She has an accountant, I'd ask them to examine the new and not so new options for charitable companies (CICs, CIOs) and see if any of these would be useful.

Note that being a charity and offering paid-for services might not make the least difference: if VAT is due on those services, then VAT needs to be paid.

duffs54

Thank you Savvy Sue, it was her accountant who told her that as we do not do personal care she wasn't able to register, maybe she should ask another one, I will let her know what you have said

Cheers

Seanymph

She should definitely ask another one - you could be a not for profit CIC - but another option would be to split the business you are doing, so that both companies remain under the VAT threshold.

antrobus

duffs54 wrote: »

Thank you Savvy Sue, it was her accountant who told her that as we do not do personal care she wasn't able to register, maybe she should ask another one, I will let her know what you have said.....

As far as I'm aware, a charity is an organisation established for charitable purposes. I would have thought that taking out "vulnerable people with various health problems via the NHS qualified" as a 'charitable purpose' under the heading of "the relief of those in need because of youth, age, ill-health, disability, financial hardship or other disadvantage". Certainly the Community Transport Association is a charity, and it doesn't do any more than move people about the place.

http://www.charitycommission.gov.uk/about-the-commission/our-partners/partner-umbrella-bodies/community-transport-association-uk/

Actually, it might we worthwhile contacting the Community Transport Association - Whatever type of organisation you are: a charity; a voluntary or community group; a social enterprise; or a local authority - if you provide transport to your members or the public, then the CTA is here to help you.

Seanymph wrote: »

... but another option would be to split the business you are doing, so that both companies remain under the VAT threshold.

HMRC have disaggregation rules to deal with that sort of thing. If they regard the separation as 'artificial', they will ignore it.