Share this content

How to treat expenses paid on charities behalf?

I am trying to explain to a grant provider why we need information on what they’ve paid for us.

Didn't find your answer?

I prepare some accounts for a non-profit organisation under FRS 105 (UK GAAP), and we have a donor who pays for some expenses on our behalf.

My understanding here would be that in our accounts we would treat this as:

 

Dr Expense

Cr Donation received

 

and in their accounts they would treat this as:

 

Dr Donation paid

Cr Bank

 

however when I am requesting the information from them to know how much to include in our accounts they are refusing and saying we aren't allowed to include this as it is their expense. Does anyone know of any standards or articles I can point them towards to prove that I need the information?

Replies (11)

Please login or register to join the discussion.

avatar
By paul.benny
04th Jul 2022 08:50

Have you considered the possibility that they might be right? Or at least have a good rationale for their approach. It would be good to understand their reasoning before trying to tell the donor they are wrong.

And to clarify - are you a charity as per the heading or a non-profit as per the question?

Thanks (0)
Replying to paul.benny:
avatar
By Tax Dragon
04th Jul 2022 09:45

Fancy a laugh? Want to hear a tax bod's uninformed view? Then read on. Too busy, look away now...

Can't be a charity can it? At least, I thought they weren't allowed to use FRS 105. (Which might explain why OP still hasn't found what they're looking for.)

Under SORP/FRS 102 (as applicable to charities), I thought account had to be made of donated services pretty much as the OP states.

Thanks (2)
Replying to Tax Dragon:
avatar
By paul.benny
04th Jul 2022 10:51

Always a pleasure to hear from you. And as noted, the OP seems unclear about some of the facts in the matter.

Thanks (0)
Replying to Tax Dragon:
avatar
By Hugo Fair
05th Jul 2022 09:53

OP = U2 ?

Thanks (1)
avatar
By Tax is always taxing
04th Jul 2022 08:56

What do the expenses relate to? Are the expenses invoiced to you, if they are your expenses?

If not, what makes you think they are on your behalf? Who has authority to incur expenses on your behalf.

Thanks (0)
avatar
By Paul Crowley
04th Jul 2022 09:48

Vague terms
Non profit?
Does that mean Charity? (These things are not the same.) Accounting standards are different.
Is it both limited and a charity?

https://www.icaew.com/technical/financial-reporting/accounting-for-speci...

If charity then Micro accounts not allowed.
Who incurred the expenses? Your non profit or the donor?

Question just so vague, yet you want to prove a point. Has your request to donor been equally vague or caused confusion such that they think the expenses will be double counted?

Who is Donor? A charity? Foundation? Tax paying company?

Thanks (0)
Replying to Paul Crowley:
avatar
By Tax Dragon
04th Jul 2022 09:47

Hey thanks Paul... so uninformed tax bod (UTB) was at least part right! :-)

Thanks (1)
Replying to Tax Dragon:
avatar
By Paul Crowley
04th Jul 2022 09:56

UTB was spot on for all relevant matters.
I despise the term non-profit
Has no specific meaning and usually means NOT a charity, a normal tax payer pretending to to be a charity and looking to get free stuff.

Thanks (0)
Replying to Paul Crowley:
avatar
By Tax Dragon
04th Jul 2022 10:30

Paul Crowley wrote:

looking to get free stuff.

They've come to the right place.

Though not everything that's free has value.

Thanks (1)
Replying to Paul Crowley:
Routemaster image
By tom123
05th Jul 2022 08:31

I imagine "non profit" is an American import, a bit like "B Corp"

Thanks (0)
Jane
By Jane Evans
05th Jul 2022 11:40

My bugbear is "social enterprise". It is put forward as solution to all tax matters. There's no such thing, it is just a buzz word.

Thanks (0)
Share this content