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Another payroll query

Change of entity

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we have a client that was an unincoporated not for profit, that has changed to being a charity. (was already the chairty when they came to us)

the change in entity occured around August 2018

first accounts prepared were the final accounts of the unicorporated body - no problems

we are now preparing the first period accounts for the charity, we find that the employer refernces from the unicoporated body have continued to be used and that the employers NI allowance has been claimed in full

We think that a new employer reference should have been sought for the charity and that no employers NI allowance should have been claimed for the 18/19 year as there was already a claim under the unincorporated body (i'm happy to be corrected here)

the client uses an outsourced payroll provider and they are claiming to not know about the change in entity

I'd like to advise the client on the best way forward to correct, but I'm not 100% sure of the best course of action - can anyone help?

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By Ranse
15th Oct 2019 15:06

You are correct - when a charity changes it status , they have to register as a new employer with new employer references and new gift aid number etc . what i did the last time was to issue a P45 on the old trust and re- employed them again in the new status ( they have to sort the legals ).

other stuff to watch out for - have they got a deed/legal docs to transfer all the asset and liabilities to the new entity? if not you have no accounts - good luck

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By Wanderer
15th Oct 2019 17:52

The same PAYE scheme numbers may have been used under the succession rules. May not be a good idea when the new entity is a charity

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