July 10th 2018
Compliance is now a major part of the AAC operation. Over the last 2 years, extended checks have been performed by our compliance team, on all large grants especially those which are destined for outside the UK. We contact our clients regularly to confirm source of funds and that there is no personal past or future benefit. We also contact charities to verify details of a specific donation or project – or to confirm their Charity Registration, Trustee and Bank details.
We continue to enhance our computer systems to examine each payment – automatically – and are able to identify which ones require further checks.
In Spring 2018, the threshold for checking transaction was lowered to just £2,000 for all donations abroad.
This is in response to HMRC and the Charity Commission putting the onus of responsibility on the trustees of all charities to ensure that all grants are indeed charitable according to the UK definition of charitable. This is ultimately at the discretion of HMRC as to whether adequate steps have been taken. We recommend you read an article which appeared in Taxation in July 2018 on this subject, part of the article can be viewed here .
This work has added dramatically to the level of due diligence we have to undertake at the charity end and involves obtaining detailed plans of any new projects, ongoing expenditure of the charity and ongoing progress reports of the project including all the finances. In some cases, we need to visit the offices and / or facilities of the charity to conduct face-to-face interviews with the trustees.
This means that our clients and the charities we support are likely to have greater contact (and requests for information) with our compliance team.
At some point in the future we plan on levying a fixed compliance surcharge, but we will advise you of this before you confirm your request for grant to be made. In all cases, rest assured that if you are contacted it does not reflect in any way on you or the charity that benefits from your donation.
As with all our services, although quality compliance and avoidance of Money Laundering is our goal, we will ensure that this process is as smooth as possible for you.