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27 June 2014 minutes

Notes from meeting 27 June 2014
Blandford 10-11.30am
Present: Sophie and Lee (with Ian on the phone for 20 mins at the end of the meeting)

Submitting annual accounts
Lee wanted to check whether we have received any mail from Financial Conduct Authority (previously Financial Services Authority), HMRC or Companies House. We checked with John as his office is our registered address, and nothing has come in. We’re expecting forms from FCA soon that we need to complete for our first annual return. We will need details of the directors and treasurer to complete the form, such as name, address, year of birth, occupation and other directorships. We’ll also need information like how many members we had at the beginning of the year, how many left, joined and how many at the end. Our accounts must be submitted in August. According to our Rules members should sign off the accounts within 6 months of our year end (which would be end of July) during a General Meeting, this may have to happen a little late this year. We could add a short General Meeting to another Edge meeting rather than calling a separate meeting. All directors should be present at that meeting.

We will need to contact HMRC to tell them we are a non-profit and not trading and therefore should be classified as dormant for tax purposes. Lee has experience doing this with another group, and this was also the advice from Co-operative Assistance Network, who gave us some free advice via Co-operatives UK when we first registered.

Lee’s firm, J.Lee Management, are very kindly doing our accounts pro-bono this year. We will need to sign a Letter of Engagement with them just so we are all clear on what they will be doing for us.

I have provided a spreadsheet with all the transactions of the bank account since it opened in September 2012, however, it’s usual practice for an accountant to see the actual printed statements so we’ll need to provide those. They will also need to see ‘purchase invoices’, such as invoices for venue hire fees and my invoices since I’m working as self-employed. We don’t need these for grants. It is preferable that all transactions are made via bank transfer as this then shows up on our statements and is therefore proof in itself of how funds have been used. However, it is even better to have invoices and receipts as well where possible. We should give people a receipt to sign when we give them cash, to cover travel costs for eg, as evidence for what the payment was for.

Paying members (and others)
When paying people for organising events etc, or in my case, administration, we should ask them to sign a contract which lays out the conditions of the agreement. Lee has provided a template for this which can be used for hiring people who are registered self-employed. There are a few clauses in there which are specific to self-employed contracts, such as the principle of substitution which says that the person being contracted can hire someone else to do the work, that they are responsible for paying their own taxes and having to correct unsatisfactory work in their own time (more here: http://www.hmrc.gov.uk/employment-status/#1). It’s important that anyone who is paid for Edge work signs the contract but also issues us with an invoice for ‘services provided’ as this is more proof that someone is self-employed rather than an employee. It does not need to be a detailed invoice and can cover both people’s time and other costs, such as hiring a venue and providing food and drinks. If we follow these procedures then we shouldn’t have any problem should the Inland Revenue at some stage want to investigate whether we should have been paying people under PAYE (eg paying National Insurance and collecting income tax). These considerations only apply when we are paying people for work, it does not apply if we are only covering people’s expenses or where we are giving a donation to an individual.

Treasurer
Treasurers are usually involved in book-keeping, managing the bank account, fundraising, making payments and submitting annual returns. For Edge, the most urgent and important issue is that we need to have more than one person overseeing our bank account and financial management. We also need to replace the current signatories on the Co-op account as they are no longer active members and need another signatory on the new Triodos account.

Ian kindly offered to be our Treasurer at the meeting 14 June in Leicester. We spoke to Ian on the phone to agree that:

  1. Before any payments are made I will email Ian a list of payments due for him to agree.
  2. Every month I’ll send a copy of the bank statement so he can check everything is as expected.
  3. Lee will send Ian the Sage file (Sage is the book-keeping software accountants use) of our first year accounts, which will have all the various categories we use set up (which will need to be agreed by members).
  4. Ian will take over the book-keeping using Sage, which will mean probably around 3-4 hours per month inputting the transactions from the bank account statement. This will be on a trial basis to see how Ian gets on with it.
  5. Ian will keep an eye on our budget (although would appreciate a more detailed budget than what we currently have).
  6. Ian will think about joining the Fundraising Group.

We could also potentially set up the online banking so that two people have to authorise each payment, but this could get complicated and hold things up (especially if someone was away). Currently, two signatories are needed for cheques. We could also think about whether we want to have a scaled system where only payments over £500 (for example) need to be approved by Ian.

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