Charitable Status Consultation
Signpost Housing Association (SHA) is
currently registered under the Industrial and Provident Society Act
1965. It is also registered with the Tenant Services Authority who
regulate the social housing sector. It is a non-charitable
company.
On 26 November 2009, SHA’s board agreed
in principle and subject to consultation with residents and
stakeholders, to pursue the conversion of the Association to a
charitable company.
The proposal to pursue charitable
status arises principally for financial reasons because charitable
companies are not subject to tax. Our current forecast estimates
that over the next 30 years, SHA’s tax bill will be approximately
£60M.
Conversion to charitable status means
that this tax liability will be removed and this money can be used
to improve the provision of services to residents.
There are other benefits that
conversion to charitable status also brings. These include
eligibility to receive gift aid payments from non-charitable
companies, access to grants that are currently restricted to
charitable companies, and some VAT concessions.
There are also some disadvantages with
conversion to charitable status. The main one is this that SHA’s
activities would be limited to those that further charitable
objectives or are justifiable as proper investments. However, the
majority of SHA’s current activities already fall under these
classifications. The other disadvantage is that once charitable
status has been granted the Association would not be able to revert
to a non charitable organisation in the future.
The majority of housing associations in
the United Kingdom are charitable status organisations, including
the three other housing associations in the Spectrum Housing Group,
Western Challenge, Medina and Signpost Care Partnerships.
In preparation for this change in
company status, we have consulted with all residents and
stakeholders with whom we work.
We wrote to all Signpost residents at
the beginning of January to invite their comments on the proposal.
By the close of the formal consultation period we had received 141
responses, the majority of which indicated clear support for the
proposal. We also received a number of questions from
residents. The majority of which related to any potential impact
the conversion to charitable status would have on rents, tenancy
terms and conditions, right to buy and shared ownership. In brief,
charitable status would have no impact on these and existing
rights, terms and conditions would remain the same. Rents and other
charges would continue to be set in accordance with our rent
setting policy and the requirements of our regulators, the Tenant
Services Authority.
Residents were also keen to know if the
tax savings associated with the proposal would mean that
maintenance and repairs to their homes would improve. Signpost is
planning to invest 197 million pounds in the next 30 years in terms
of maintaining and improving existing properties and the tax
savings would greatly support that programme.
We aim to achieve charitable status by
the spring of this year and will provide residents with a further
update in the summer addition of Your Voice and on the SHA
website.
If you would like to find out more as
SHA’s progress in achieving charitable status please contact Debbie
Fairlie on 01258 484881 or by email deborah.fairlie@sha.co.uk