Interesting - I am sure that you will agree there is a distinction between Excepted and Exempt and as a matter of fact both are categories appearing in Charity Law. Neither relate to VAT exemption as that comes within the jurisdiction of the Revenue & Customs.
Whilst these two categories and also registered status are well defined within Charity Law, there is some distinct blurring of the application as it relates to ACO Charities. This is not helped by the review of Governance which has added to the confusion, One notable addition is the discovery that Charities are required to be managed by Trustees, so ACP11 introduces this requirement ignoring the fact that Trustees are defined by totally separate legislation, and as Charity Law pre-dates The Charities Act 2011, the ACO related Charities have always had Trustees in the form of the Civilian Committee members.
The 2011 Act actually ended Excepted status for new Charities on and from 31 January 2009, therefore Statute appears to say that any New Charity, after that date, is required to be registered. The ACO seems to have a different interpretation which has yet to be substantiated.
Mention of Form 60 is another contentious issue; Excepted Charities are required to prepare and maintain annual reports and accounts, but there is no requirement for any annual submission to the Charity Commission; the ACO has come up with Form 60, which has no basis in statute, and yet the ACO perceives they have powers akin to the charity regulator. This is where the ACO believes it has powers of control over Trustees, when in fact Trustees are accountable to the Charity Commission, and bound by Statute, but not under the control of the Commission other than where the Commission is required to intervene ‘in the interests of the charity and for the protection of charitable funds’
Whatever perception the ACO, there is no evidence to suggest that after Form 60 there is used to monitor that charitable monies are applied properly and consistently in accordance with the aims and objectives by the authorised Trustees, for the benefit of the Cadets. Instances of payments for Car hire and probably air fares for overseas visits by non beneficiaries come to mind.
At present it is doubtful that whatever is said in ACP10/11 is a true and indicative (and legally qualified) statement of charity law. It is not then clear how the Law has ceased the granting of Excepted status, yet new Squadron charities can claim to be Excepted, when this was always dependent upon the Commission making a specific Exception order. Ultimately the requirement will be that all Charities will be Registered as is the Law in Scotland and Northern lreland.
As far as VAT is concerned, as a not for profit organisation, and the majority of ACO charities with modest income/turnover, it seems hardly worth the hassle of further administration. But when you read up, it seems more a matter that certain goods and services are exempt and the ACO is not a supplier of goods and services.
It also seems that for any VAT involvement, you need a Charity Registration number, which you don’t have as an Excepted Charity and neither does the ACO, because the ACO is not itself a Charity. But you can claim back VAT if you are registered for VAT, but that threshold is high and way above most Squadron income level.
But this is a decision that Trustees can make themselves in their remit to manage to Charitable funds, in the same way that they can decide to become a registered charity, if they determine it to be to the advantage of their charity.
Gift Aid: when this first thrust itself upon the ACO, there was a requirement for a signed declaration to confirm status as a UK tax payer. There was potential to retrospect this over 6 years - you can imagine the work entailed in contacting all the adults over this period, because sadly the ACO has always had a high rate of attrition. When I was Treasurer, supported by my colleagues, it seemed to involve an inordinate amount of time, so we did not pursue it. Currently the process does not require individual declarations, so why not look into it.