Just wondered whether anyone knew whether as a Bee Association, with income coming in from Membership Fees and a small amount of Honey Sales, whether the group is obliged to submit a Tax Return each year?
As has already been said by Alldigging and Pargyle it's relatively easy to set up an unincorporated association (much easier than setting up a charity)
Having set up a number of associations there are a few simple tips to keep you squared away so that your fund raising doesn't become a tax liability.
1. Set up rules for your association that make it clear that you're a not for profit association and clarify what the funds can be used for.
2. Make it clear what the purpose of the association is and the benefits that the association is looking to provide its members or to society.
3. Make sure you elect a serving treasurer and appoint an independent auditor for the association's accounts. If possible have two mandated signatories for all payments made and keep a tight reign on fund raising to make sure there's no illicit money making scams riding on the back of any association events (selling jars of honey for cash provides ample opportunity for this so keeping a sales inventory to provide an expectation of sales would be a good idea as would keeping a transparent price list).
4. As well as running accounts set up a budget that predicts future costs. This is important because you can then tailor your fund raising to specific anticipated running costs and define the period within which moneys have to be spent. Be careful that you don't end up paying members without understanding whether or not you've created employer-employee relationship and generally speaking association funds can't be used to 'pay' members for their labour. Paying members for expenses is fine but just make sure you keep all receipts and that they can be justified in terms of association functions.
5. If you start raising more funds than you need, then you need to have a mechanism for ensuring that you spend those funds on legitimate association events which can include things such as social blow outs or payment of future membership fees. You can fund things such as association hives provided that the hives remain the property of the association and are not gifted to any individual member and these can be used for, for example, mentoring or research. Just be careful that any honey sales generated from such hives don't create a surplus profit and that the hives don't become a saleable asset at the end should the association wind up. If they do then they may become a tax liability.
6. Think about what happens in the event of winding up so that you don't end up with assets or cash that you can't spend on legitimate association business before you finally wind up.
And leading on from that what are the benefits to an Association becoming a Charity?
Many thanks.
What would the charitable function/aim of the charity be? There are significant rules and hoops to jump through when it comes to setting up and running a charity (and that's talking from experience) with legal responsibilities and annual reporting to the charities commission.
https://www.gov.uk/topic/running-charity/setting-up
