Are AGM's and audited accounts compulsory?

[James Yelland]

Does anyone know the rules governing annual general meetings of bands? Are they compulsory? And is it also compulsory for a band to produce an annual set of audited accounts? Any legal brains out there?

Thanks

 

[PeterBale]

I'm no expert, but it may well depend on what is stated in the band's constitution, if you have one.

Regarding audited accounts these are a must if you are intending to claim any grants from the lottery, local authority or any trust funds etc.

 

[Despot]

No, not unless you have a constitution that says you must have an AGM.

No, again unless you have a constitution that says so, you don't need audited accounts. (Bit expensive to get done aren't they?)

Not legally obliged to do anything! Unless it's a registered charity perhaps?

 

[yorkie19]

I'm don't think that's right.

As I understand it, Brass Bands are goverend by the same set of rules that apply to any Club, Society or Voluntary Association. This means that Brass Bands ARE liable for Corporation Tax. What is actually liable for tax and what is not is a blurred area. Some concerts, if they are organized by the band as a fundraiser, may not be liable for tax, but other concerts, where the band receives a fee for turning up, may be. The band will also need to consider the money it pays to conductors and players. In some cases, they should also be paying some NI contributions for the conductor.

Additionally, any bank interest earned is liable for tax.

In my experience, some bands don't feel the need to prepare a set of year-end-accounts, or to file a tax return. This leaves them, or particularly the treasurer, open to legal proceedings.

Back of a fag calculation - I suspect a lot of bands either won't have to pay anything, or will pay a few quid.

www.inlandrevenue.gov.uk for more information.


Sam

Edited because I want to keep my job.

 

[Di B]

It makes sense for the accounts to be audited in a band, at least internally if not externally. It stops fraud taking place.

If a band is a registered charity, then their accounts need to be in reasonable condition and I am pretty certain this required an external audit.

Note: As for the cost, why not just ask a band friendly accountant to do it as a favour to the band? You don't need to employ the services of a chartered accountancy firm you know!

If the band is not registered as a charity then they are liable to tax. (They are not liable to Corporation Tax however unless the band is a registered limited company.) This is a fact for all bands. I have known bands get a tax return in the past. It can and DOES happen.

Most bands do not have to pay tax however. This is because most bands fall underneath 'non-profit making' organisations. Your accounts can show that whatever money you earn is put back into running the band and purchasing items for the band. No one is making a profit. As tax relates to profits made, no tax needs to be paid. The revenue are within their rights however to inspect/audit the accounts and ensure that no tax evasion is taking place.

I don't think this is set in stone for all brass bands, but it is the generally accepted 'norm'. However, from a safety point of view if you don't have a record of your accounts, then the Revenue could ask you to pay tax on an estimated amoun(by them!) of profit.

If you employ a conductor then they are in theory not only subject to National Insurance but to PAYE as well.
However, as conductors change bands, take more than one band, teach etc etc the conductor is classed as self employed, and they declare their earnings from conducting on a self assessment tax return. If they work in addition to conducting the band, they will not have to pay any NI (you only contribute once!) but will pay tax.

This info is from the remainder of my knowledge from my years in the Chartered world of accountancy so may be not quite as accurate in places as it should be - apologies in advance for this!!

 

[Di B]

Bank Interest - again, liable for tax officially. However, if you inform the bank of the type of organisation you are I believe that you may not necessarily pay any charges - it is worth asking the question!

 

[yorkie19]

Just quoting from the IR's site: http://www.inlandrevenue.gov.uk/pdfs/ir46.htm

'Clubs have to pay corporation tax on their taxable income and chargeable gains which are called 'profits'

Again, I'm not a tax specialist, so I'm not up to speed on this, but I would strongly advise people to look at the link above.


Sam

 

[Despot]

Just quoting from the IR's site: http://www.inlandrevenue.gov.uk/pdfs/ir46.htm

'Clubs have to pay corporation tax on their taxable income and chargeable gains which are called 'profits'

Sam

Differs from country to country but I'd say that applies to Golf, football, tennis clubs and the like were they have there own bars, shops etc, and are generally making lots of money. If that were the case, the darts club down the pub are liable for tax!

Most bands would fall under the heading of "non-profit" or "voluntary". The keyword there is "taxable income". You have to make a profit to be taxed!

But sure, everyone should have there books in order, but again, more common sense than a legal requirement!