The minute we enter the season of Lent, the new year is well underway.

For those members with a December financial year end, this signals the external scrutiny of financial statements and with it the stresses that come with it to a greater or lesser extent.

For those who have that to look forward to later in the year, there may be other challenges.

Life for the church treasurer/accountant/financial administrator/trustee is hardly ever stress-free.

However, Lent is an opportunity to consciously stand back, make time, and, in quiet moments, reflect on the significance of this season, drawing spiritual strength from what it offers.

February is a short month, but nevertheless, we hope that this newsletter provides food for thought and practical guidance, combined perhaps with some inspiration to encourage you.

Do also look out for resources from our Partners in Ministry, including a guide to finding the right bank for your charity from CAF Bank and details of a £500 grant opportunity from easyfundraising.

Table of Contents:

1. What’s new
   • Listed Places of Worship Grant Scheme is closed
   • Updated Charity fundraising: a guide to trustee duties (CC20)
   • More than 800 churches to benefit from £600,000 investment to welcome children with additional needs
   • Faith & security training
   • Church-based Outreach-related Initiatives and Governance
   • Charities and campaigning: reflections ahead of the local elections and the Senedd elections
   • Enjoying this month’s highlights?
2. Points to Ponder
   • The Challenge – increase personal giving in line with inflation.
   • Financial reparation – Can it heal the past?
   • Church worker avoids prison sentence after stealing £100,000 of Diocesan funds
   • Lent – A time for reflection?
3. Helpline Q&A
   • Corporation Tax returns
   • Recording income received from the Listed Places of Worship Grant Scheme
   • Churches and VAT
4. Partners in Ministry
   • Finding the right bank for your charity
   • Considering repayable finance for your charity?
   • easyfundraising grant
5. Spring Training Programme
6. Charities Engagement Team – Upcoming webinars
7. Final Thought

God bless,

Ashley Ellis
ACAT Executive Officer

P.S. To make sure you don’t miss important updates, please add @acat.uk.com to your safe senders list. Some members have found our emails ending up in spam folders. We’ve put together a simple guide for Outlook, Gmail and other email providers at: https://www.acat.uk.com/make-sure-you-get-acat-emails/

Listed Places of Worship Grant Scheme is closed

#Finance & Fundraising, #News, #Information Only

All awards within this year’s £23 million budget have now been allocated to applicants, and the Listed Places of Worship Grant Scheme for 2025/26 has now closed to new applications.

There will be no further funding rounds. Please be advised that further applications will not be accepted.

Following the closure of the Listed Places of Worship Grant Scheme to new applications, attention is turning to its successor, the Places of Worship Renewal Fund. Further details are gradually emerging from ministers at the Department for Culture, Media and Sport.

The new fund will distribute £92 million over four years (approximately £23 million per annum), maintaining a similar overall level of support. However, the method of delivery will change significantly. The Renewal Fund will operate as a capital grant scheme, providing funding upfront for repair and restoration projects rather than reimbursing VAT after works have been completed. In some cases, grants may cover a greater proportion of project costs than previously available.

Funding will no longer be allocated on a first-come, first-served basis. Instead, the intention is to target support towards places of worship in areas of greatest need, including those described as experiencing “double disadvantage,” and towards projects demonstrating clear community benefit.

Evidence presented to the House of Commons Culture, Media and Sport Committee indicates that the new approach will be more focused than the scheme it replaces, with applications assessed through a proportionate process.

Detailed guidance, including eligibility criteria, definitions of priority areas, and the application timetable, has yet to be published.

Updated Charity fundraising: a guide to trustee duties (CC20)

#Finance & Fundraising, #News, #Encouraged Action

Earlier this month, the Charity Commission updated its guidance to Trustees regarding fundraising. The aim of this update is to make the guidance document (CC20) easier to reference.

The key areas covered are: 

• Legal Compliance – following the fundraising code
• Planning an effective fundraising campaign
• The costs associated with fundraising
• Awareness of the risks associated with fundraising
• When raising significant funds above expectations
• Delegating the fundraising process to third parties
• Promotional material and associated documents
• Working with professional fundraisers
• Fundraising by trustees & connected parties
• Protecting the funds raised
• Transparency and accountability
• Dealing with complaints

At some point during the year, we will likely be involved in fundraising to varying degrees. Whatever the project or the fundraising target, taking the time to consider the Commission guidance is advisable.

More than 800 churches to benefit from £600,000 investment to welcome children with additional needs

#Church life & Community, #News, #Encouraged Action

On 5 February, it was announced that the Church of England Strategic Mission and Ministry Board had invested £600,000 with Growing Hope, a charity which supports children and young people with additional needs, recognising that attending church can be a challenge.

Growing Hope, founded in 2018, establishes free church-based therapy clinics for children and young people with additional needs. 

The focus is on:

• Accessibility and the constraints of older buildings
• Behaviour challenges within congregations
• Identifying possible modifications to patterns of worship and the environment

The funding available will initially benefit some 375 Anglican churches. 

The Bishop of Bedford, Richard Atkinson, who is lead bishop for the ministry of and amongst deaf and disabled people, said: “I believe this programme is an important step in advancing the Church of England’s vision of becoming a diverse and truly welcoming church for all.“

However, the issue raises the general question of how we support the members of our congregation and their families who have additional needs and for whom congregational worship can be a challenge.

It would be helpful for our membership to learn how other churches support those in our fellowships with additional needs.

Faith & security training

#Church Life & Community, #News, #Encouraged Action

It is a sad fact of life that in our polarised society, our churches can no longer automatically be regarded as ‘safe places.’

The Home Office has recently announced the launch of Faith Security Training (FST). This is a security awareness scheme designed specifically for faith communities across England and Wales.

It is free of charge and will be delivered on behalf of the Home Office by CDS Support.

The FST will be available either as in-person sessions, online, or by e-learning

Who should attend?

• Clergy, Ministers, Pastors
• Trustees
• Church Administrators
• Volunteers

Course focus

• Understanding possible threats
• Actions which can be taken to reduce security risks
• Responses to security issues identified
• Possible security scenarios
• Security-related governance & management

Whilst we will endeavour to notify our members of course details as they are announced, it is suggested that you access the link below periodically.

Wherever our churches are located, in city centres, urban neighbourhoods, or rural villages, we ignore the security of our buildings and the people who use them at our cost.

Church-based Outreach-related Initiatives and Governance

#Charity Governance & Regulation, #Opinion, #Encouraged Action.

Most churches will periodically seek to establish new initiatives for a variety of reasons, including:

• Drop-in café for older members of the church and community
• Bereavement support group for those grieving the loss of loved ones
• New youth group 
• Children and families group 
• Creative arts facilities
• Welfare support for the homeless, including food bank provision
• New church plant

The impetus for any such initiative is likely to be outreach in some form or other, whether that is avowedly evangelistic or simply to provide support for specific groups of people within the church and the wider community.

In the wake of the Soul Survivor safeguarding failures, the Church of England has now issued a revised Code of Practice for Bishops’ Mission Orders (BMOs), which is intended to strengthen governance and safeguarding, particularly in respect of what are termed “new worshipping communities.” 

The essential elements of this new Code of Practice are that these new worshipping communities:

• Belong fully within the life of the church
• Must operate within its policies and structures
• Continue within the fundamental expressions of faith and belief of the Church of England.

Although this revised Code of Practice has been drawn up with a specific type of initiative in mind, there is a wider principle which churches need to consider.

Any initiative established by a church governing body, for whatever purpose, ultimately remains the responsibility of that governing body and must comply with the required standards of governance, leadership, and safeguarding.

This can be critically important when separate entities are formed, each with its own committees responsible for day-to-day management and administration.

Whilst these functions may have been delegated by the church governing body, it ultimately retains responsibility for all aspects of governance and leadership, together with safeguarding.

Charities and campaigning: reflections ahead of the local elections and the Senedd elections

#Charity Governance & Regulation, #News, #Information Only

With elections to the Welsh Parliament and local elections in England on the horizon, the Charity Commission has reissued its guidance to charities on involvement in campaigning.

Charity Commission Chief Executive, David Holdsworth, has emphasised the vital role which charities (and therefore churches) have in our democratic society. 

However, in our currently polarised society, it is important to emphasise the need for charities to remain independent of political parties. Charities may campaign on specific issues, but it is vital that any activities are within the legal framework.

The Commission’s five-minute guide referencing political activity and campaigning, so far as charities are concerned, is well worth looking at. 

In summary, the advice is:

• Ensure that decisions are consistent with those a reasonable body of trustees could make
• Act within your charity’s governing document
• Act honestly and only in your charity’s interests
• Be sufficiently informed, taking any advice you need
• Take account only of the relevant factors
• Be aware of and manage any conflicts of interest

The Challenge – increase personal giving in line with inflation.

#Finance & Fundraising, #News, #Encouraged Action

2026 is now well established. Church treasurers, accountants and financial administrators with a 31 December financial year end are involved in (or thinking about) what the annual accounts will finally reveal.

Whatever financial picture emerges, the perennial challenge of increasing the giving of church members will loom large.

There is evidence that, although it is now several years since the height of the pandemic ended, church membership giving has not kept pace with inflation and has arguably fallen in real terms overall by as much as 30%.

This raises the question, how can we motivate, encourage church members not only to give regularly in a planned way but to increase their giving each year in line with inflation?

A few thoughts on the subject.

• Create a discernible sense of financial trust within the church.
  • How, if at all, is financial information communicated to the membership?
  • Are financial issues discussed openly and transparently?
  • Is there a clear vision for mission and outreach which the membership understands?
  • Are annual budgets and financial stewardship features of church governance?
  • Is the membership aware of the need to meet annual expenditure increases?
• How is the need for planned regular giving presented to the membership?
  • Is giving presented as a response to God’s generosity to us?
  • Is biblical teaching on the subject a feature and seen as part of discipleship?
  • Is the challenge of increasing annual giving presented to the membership?
• Dealing with the generational divide
  • Anecdotally, younger generations are more open to the idea of planned giving.
  • Don’t be afraid to sensitively challenge older members’ more traditional views, which may be based on the idea that God will provide because He always has.

This is not an easy subject at any time, but particularly so at the start of another year with all its financial challenges.

Financial reparation – Can it heal the past?

#Social Justice & Policy, #News, #Information Only.

In 2019, following research, the Church Commissioners of the Church of England identified a link with one of its endowment funds to investments made and income received from the historic transatlantic slave trade. The Queen Anne’s Bounty was established in 1704 and subsequently inherited by the Church Commissioners.

Their response has been to establish a fund named Project Spire, which will build to £100 million by 2031. Its object will be “to invest in a better future for all, working with and for communities affected by historic transatlantic slavery, with the intention that it creates a lasting legacy.”

Precisely how that will be achieved is yet to be established. 

However, the project has its critics, who argue that the funds should be used to support struggling parishes in the UK.

Whatever the rights and wrongs of the arguments on both sides, it raises the question, “To what extent can financial reparation ever expunge past mistakes when it comes to church failures?”

The theologian might argue that repentance involves admitting past wrongs and a commitment to living and acting in accordance with Christ’s teaching and example. 

In our transactional society, relationships are frequently seen in terms of an exchange of valuable services between parties. Where historical church failings are identified, particularly in safeguarding, is restorative justice best served by monetary compensation, if that is at the expense of mission and community outreach?

Whilst theologians and those in the ordained ministry might have one view, financial administrators and trustees might see things differently.

Not an easy question, but one on which it would be interesting to hear the views of members.

Church worker avoids prison sentence after stealing £100,000 of Diocesan funds

#Church Life & Community, #News, #Information Only

A church worker who stole almost £100,000 from the Roman Catholic Diocese of Westminster has avoided an immediate prison sentence. The mother of four from Stonebridge Park in Brent worked as a gift aid and operations technician. 

It began with a payment of £247, escalating in a total of nine transfers to a single amount of almost £20,000.

This incident, a tragedy for all concerned, serves to emphasise the importance of effective financial control procedures governing approval and authorisation of payments, particularly where large amounts are concerned.

When was the last time your trustee board reviewed its fraud prevention procedures?

Lent – A time for reflection?

#Church Life & Community, #Opinion, #Encouraged Action

This week marks the beginning of Lent. By the time this week’s news update is published, the pancakes will have been consumed, Ash Wednesday observed, and the sacrifices which we may (or may not) have committed to begun.

However, we observe this period in the lead-up to Easter; fundamentally, it is an opportunity for reflection. The many Lent courses available in churches throughout the country will include that as a significant part.

But what of church accountants, administrators, and trustees whose priorities are centred on very pragmatic, down-to-earth matters.

All manner of advice is available, but five questions to think about spring to mind.

• How might we do things better?
• What is God saying to us about exercising our gifts in the ministry of administration?
• Are we making time to stand back and look objectively at our church finances?
• Are we being good stewards of the resources God has provided?
• Is the vision still alive?

Corporation Tax returns

Q1: Our small church has received a notice to make a Corporation Tax return. After a great deal of messing about and getting access to the right tax in our online account with HMRC, I discover that:

1. We are covered by the exemptions for charities that spend their income on charitable activities, but
2. We cannot use the online system and need to use software to submit a return.

There is a long list of possible software. This seems unreasonably cumbersome. Can you suggest what I should try next, please? I’ve looked at your FAQs, but I suspect they predate the move to making tax digital.

Q2: We have recently been asked by HMRC to complete a Corporation Tax return for year ending 31/12/2024 (never been asked before & I was hoping it would go away – but looks like it won’t & I may have already incurred a £100 fine).
Can you give any advice on what is required?

A: HMRC are changing the process for filing Corporation Tax returns due to their ‘Making Tax Digital’ programme. It is our understanding that this doesn’t make it easy for churches. Churches and Charities do not pay tax on most types of income as long as they use the money for charitable purposes. For a full wording and definitions, please see https://www.gov.uk/charities-and-tax.

A church used to be able to write NIL on the form and return it through the post but this is no longer possible. If you receive a form and have a NIL return to file, may we suggest that you visit this website:

https://www.hmrc.gov.uk/gds/payinghmrc/ct-nil.htm.

We’re unsure how long this webpage will be available because of HMRC changing the process and rolling out “Making Tax Digital”. We are keeping an eye on the situation and will update you in future newsletters when we hear something.

Recording income received from the Listed Places of Worship Grant Scheme

Q: During 2025, we received a grant of £1,598 from the Listed Places of Worship Grant Scheme – this was in respect of the VAT incurred on repair work to the church (namely, pointing and window repair).

I was wondering where on the SOFA this grant should appear? From the CC17 accounts templates and guidance, I believe within Donations and Legacies – is this correct? Since the grant is in respect of the church, should we treat this as restricted funds?

A: Strictly speaking, income from the LPoWGS [Listed Places of Worship Grant Scheme] is a grant. As you mention, it is a repayment of the VAT that you have paid. Some may make an argument that this payment should be treated as reverse expenditure, for that reason. I don’t agree with that – it is Grant income – not Donations or Legacies.

As to where it sits in your accounts – as it is effectively a repayment of VAT – the income should be placed in the same fund as the underlying expenditure.

Churches and VAT

Q1: I’m struggling to understand how to reclaim VAT. I have a Gift Aid identity number, but can’t figure out what to do. Gross turnover this year was c £28k.

Q2: Anyone know if churches are able to claim VAT back on anything?

A: As mentioned last month, terminology can be awkward. Strictly speaking, charities do not have turnover – that’s a term used by and for trading companies and organisations. The terms ‘Income’ or ‘Receipts’ should be used.

For conciseness, I like the answer in our handbook https://www.acat.uk.com/handbook/chapter-7-vat/ *Login required

1. How does VAT affect churches?
   Churches receive income from a variety of sources, the majority of which is generally not liable to VAT.
   • Donations.
   • Most fundraising events.
   • The supply of welfare services and spiritual welfare services.
   • The supply of goods associated with such events or services. Most property rental income.

Most churches will not therefore have to worry about VAT or be registered.

Churches can claim relief from VAT on some goods and services they buy, regardless of whether they are registered for VAT (see section 6 of this chapter).

VAT on the maintenance of listed buildings can be covered by a grant (see Appendix 2) again regardless of whether the church is registered (for VAT or as a charity) or not [NOTE this scheme is closing on 31st March 2026 or whenever the amount of funds runs out, whichever is sooner].

It turns out that the person who asked Q1 was looking for assistance on submitting a grant application to the LPoWGS: “We’ve paid VAT on some roofing work, on the installation of electric heaters, and on an arboriculturalist’s report on trees in the churchyard. How do I recover those under the Listed places of worship scheme before it closes?” As this isn’t something with which we are able to assist, all I can do is point the person in the direction of the LPoWGS website to study the detail of the scheme and also make a reclaim.

It’s worth noting that the Listed Place of Worship Grant Scheme (LPoWGS) has closed, and a new fund will replace it. Please read the first article of this newsletter, ‘Listed Places of Worship Grant Scheme is closed‘, for more information.

Finding the right bank for your charity

Running a charity today means navigating a complex financial landscape, where the right banking partner can make all the difference.

Whether you’re a grassroots group or a national organisation, our new guide is packed with practical insights, expert advice, and real-world examples to help you:

• Understand the unique challenges of charity banking
• Stay compliant and confident in a changing regulatory environment
• Choose a banking partner that truly supports your mission
• Build financial resilience and protect your funds
• Access resources, case studies, and best practices from sector experts

Considering repayable finance for your charity? 

Many charities and social enterprises have successfully delivered growth projects or accelerated major plans to benefit their service users, with financial support. Could you achieve more by borrowing money or with a blended finance package of a grant and loan?

The world of borrowing can be a minefield: complex offerings, financial jargon, high street banks vs specialist charity lenders. For many, the opportunity to secure funding is often dismissed too soon.

Our charity finance resources aim to help to provide clarity, providing the questions you need to consider to find the best route for your organisation, and ultimately, for your beneficiaries. To learn more about repayable finance for organisations with a social purpose, download our Financing the Future Guide. 

easyfundraising grant

The easyfundraising Impact Fund is now open with 20 unrestricted grants of £500 for UK not-for-profit organisations, including churches to help them continue or enhance their work. These grants are unrestricted, so your church can use the funds wherever it’s needed most, eg core costs, equipment, resources, activities, or just running costs. The application form is straightforward and quick to complete and the fund is open to churches of all sizes and structures.

Fund open: 23 February – 5 April
Apply here: https://www.easyfundraising.org.uk/impact-fund/

About easyfundraising: easyfundraising helps your church raise unrestricted funding from everyday online shopping. When people choose you on easyfundraising and shop with 8,000+ retailers, the retailer donates to your church at no extra cost — and you receive the total raised every three months. Find out more: https://www.easyfundraising.org.uk/acat

• Keeping Simple Church Accounts
  • Date: Saturday 14 March
  • Time: 10 AM – 1 PM
• Accruals Accounting – Accounts for Larger Churches (2 session courses)
  • Date: Saturday 14 March, 21 March
  • Time: 2 PM – 4 PM, 10 AM – 12 Noon
• Gift Aid: Maximising the benefits and reducing the pitfalls
  • Date: Monday 16 March
  • Time: 7 PM – 9 PM
• Banking for Faith Groups – Key considerations
  • Date: Tuesday 24 March
  • Time: 12:30 PM – 1:30 PM

If you have any questions about our training, please contact Cath Fox.

The Charity Commission for England and Wales registers and regulates charities to ensure that the public can support charities with confidence. Through regular events, the Charities Engagement Team supports trustees and charity leaders to manage their charities effectively.

Courses for March and April are open for bookings.

Did you know?

You can not only manage your own newsletter subscription, but also update your details directly from your profile page. Just click your name in the top right corner after logging in to the website.

Charity no. 1072733 Registered address: Association of Church Accountants and Treasurers, C/O KM Accountants, 1st Floor, Block C, The Wharf, Manchester Road, Burnley, BB11 1JG.