CUS news

All six credit union clients gave their members dividends this year and saw dramatic increases in both Loans and Income as the effect of not being charged VAT made a significant difference.

Despite the change to FRS102 all six clients made the transfer without any hitch and they all had clean audits as a result.

The growth is showing in other ways as well as four of the six clients seek staff to work in the community promoting their products and services.

Swan is seeking a second member of staff.

M for Money is seeking two part time members.

Oxfordshire will be replacing their staff member who has moved to another post. Thamesbank is considering an appointment to increase their profile in Hounslow and Kingston.

Removing the Imposition of VAT

In 2011 our auditor advised we contact our accountants and register for VAT. On registering for VAT our client members took a terrific hike in charges for our services and for some of them is has taken a long time to recover from this imposition.

Over the last few years we have been trying to develop a “VAT Sharing Group” which is a concept that was developed by the European Union but ignored by HMRC until they were threatened with legal action.

In 2015 we engaged Kreston Reeves to develop an application to HMRC for a VAT Sharing Group which would have removed the VAT burden from our clients. 80% of our application was accepted and we are continuing to work on ensuring the last 20% meets HMRC requirements.

Interestingly a quite separate VAT expert at Kreston Reeves has suggested that we should never have been VAT registered in the first place.

Be assured one way or another we are determined to remove the VAT imposition and free our members to grow and develop.

Business Planning Front and Centre

The Second Training Event this year for Directors of our Client credit unions was held on Saturday 18th June at the Hilton Garden Hotel.

Gareth Evans Director of GRE Consulting gave a brilliant presentation covering the following key areas;

  • Having and keeping up to date Business Plans is a requirement of our Regulator and not optional. Businesses of all sizes and shapes rely on Business Plans to keep them focussed on the important issues facing their operation.
  • The planning process kicks off with a strategic planning session which should develop a consensus about the credit union’s vision and goals; strategic priorities and tactical plan.
  • This is followed by a more detailed delivery plan which considers timing; the key players that need to be involved and the resources necessary to deliver the results.
  • The next stage is to develop a budget and to allocate staffing resources to deliver the results planned.
  • Probably on a quarterly basis there should be a review of progress looking at KPIs and milestones.
  • The planning cycle becomes complete with an annual review of the results and consideration of any changes that need to be made.

 

The Business Planning Session was the second training event we have developed to answer the call from our clients that are keen to become more effective at what they do for their credit unions.

 

The next session will probably be in September and related to Anti Money Laundering policies and procedures.

Change of structure planned

In a bid to reduce costs for our clients, Credit Union Solutions Directors are looking seriously at changing their structure from a Worker’s Coop to a User’s Coop. This will obviate the need for clients to pay VAT saving over £50,000 a year.

Graham Tomlin said.

“With so much pressure on our clients to hold ever larger sums in reserve it seemed to be a no brainer for us. Last year CUBE paid £11,000 in VAT which was larger than it generated in profit.

We are keen to continue with a cooperative structure and our clients are more than happy to adopt a structure that will produce much better savings for them.”

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