I'm somewhat confused by 'mark up' as opposed to profit margin. In a village shop stocking 800+ lines (priced by various suppliers) how do we calculate average percentage to apply for reductions to ensure cost price and operating costs are covered?

Dear Charlie,

There is a unincorporated charity that is in financial difficulty and are running down their reserves. A business advisor has suggested that they trade their way out of difficulty, but to do this they would need substantial subsidy fron the LA.

What is the position for the trustees if they continue trading knowing that they are in clear financial difficulty?

I have just heard that there are different VAT regulations when you put on a fundrasing event if you give a goody bag or gifts to the people who attend/buy tickets. Can you shed some light on this or direct me to where I can find out more info?

Our draft accounts are showing one figure as the net profit and our accountant, on our tax return forms, has added a further £6,000 for Goodwill/Depreciation. This therefore makes our tax burden higher. Does this sound right to you please?

Like many charities, we hold our financial reserves as cash on deposit with a UK bank. In the light of the current credit crisis, are our funds protected by the Financial Services Compensation Scheme, or does thsi only apply to private investors? If we are covered by the FSCS, should we be looking to spread our reserves across several banks to keep within the £35k (or possible new £50k) limit of protection? Other than cash deposits, what other low risk investments are available?

Falling share prices will clearly affect the value of pension funds. However, where a financial institution managing a pension fund is taken over or nationalised (e.g. Merrill Lynch), what effect will this have on value and security of the funds that they manage?

Where a grant is convenanted to a company/charity for a number of years while they carry on particular activities - is there a minimum number of years that this needs to be in place?

At the end on the covenanted period the company/charity can write off the amount given in their books - is this correct?

What type of legal agreement will cover this - a simple line stating the terms and conditions of the grant - will that do it? 

A local authority [LA] is disbursing funds from central government - £400k approximately to childcare providers from the PVI sector. They have decided that the best way to do this is to pre select 4/5 suppliers and in a form of credits to the various childcare organisations allow the providers to purchase up to the pre set amounts [e.g. £2,500] from their chosen supplier the goods they require.

Thus the selected suppliers would need a contract for this arrangement. I realise that all template contracts would need adapting etc but would you have a template contract to cover supply of goods in this circumstance or indeed be able to point me in the right direction.

Also the issue of VAT - as this is in effect a grant form central government with no direct benefit for the LA would this be considered a business activity? How do we handle VAT in this case?

We are a charitable family centre based in Northern Ireland. As part of our services, we deliver nurturing programmes and domestic violence reduction courses.

Most of our referalls come through Social Services and our current funders (DSD for Nurturing and Big lottery for DV work) are encouraging us to seek Service Level Agreements with Social Services to fund future delivery.

Are there any examples available of other community-based groups who have undertaken similar SLA's or any advice/guidance on the process.