Hall Annual Accounts
Metfield Village Hall financial year runs from 1st April to 31st March. The Annual Accounts are prepared by Van Dijk Accountants Ltd, Halesworth who we thank for their generous ongoing advice and support.
Until March 31 2019 the annual accounts encompass the finances of operating and hiring out the Village Hall premises including the operation of the bar. However, from 1st April 2019, the bar operation was transferred to a new wholly owned subsidiary, Metfield Village Hall Trading Ltd (see below for more details).
As required by law, the annual Village Hall return is published on the Charity Commission website by 31st January at the latest each year. The accounts for Metfield Village Hall Trading Ltd are lodged with Companies House.
The year to 31 March 2018 was the first full operating year since the reopening of the Village Hall after the major facilities upgrade financed by a grant from the Big Lottery Fund. Total Income during this period was £42,491 while Total Expenditure was £31,064.
This performance is well ahead of that forecast in the business plan on which our Lottery Grant was predicated. This is due to the dedication of the many volunteers who give freely of their time to run the Hall and Hall Bar together with the continuing support of all the hirers of our excellent facilities and particularly the loyal commitment of the residents of Metfield and the surrounding area.
This result means that Metfield Village Hall finances are now on a much more sound footing and the Hall is no longer under a constant financial pressure to survive.
The year to 31 March 2019 was a period of routine hall activities without any grants impacting the financial results. Total income was £30,638 and total expenditure was £30,022, leaving a profit for the year of £616. This compares with a profit of £11,427 in 2017/18, with the difference largely due to the 2017/18 figures including a final portion of lottery grant amounting to £10,097.
Village Hall bar income in 2018/19 amounted to £24,594, down slightly from the previous year’s total of £25,217. Hall bookings were also down in 2018/19 at £4,439 versus £5,425 due to a some of our regular hirer’s ending their commitment. However, in 2019/20 there have been some additional bookings, so this downturn may be reversed in the next financial year.
On the advice of our accountants, effective April 1st 2019, the operation of the Village Hall bar was assigned to a new company, Metfield Village Hall Trading Ltd (MVHTL). The main reason for this is that the Village Hall charity constitution covers the running and hiring of the hall but as the bar is open to the public without having to attend a Village Hall event, the bar function and income was not covered by the charity constitution and consequently bar income could be subject to tax. The new company, Metfield Village Hall Trading Ltd is wholly owned by Metfield Village Hall. Its two directors, Martin Fowler and Steve Jordan, are both trustees of Metfield Village Hall and the single £1 share ownership of MVHTL is held by another trustee, Robert Steven, on behalf of the Village Hall. All the profits generated by Metfield Village Hall Trading Ltd are covenanted to Metfield Village Hall. This sort of arrangement is understood to be common in the charity world covering for example the operation of charities’ shops or cafes attached to museums or art galleries.
As the bar operation is now accounted for separately from the rest of the village hall operation, there is a significant difference in the 2019/20 Village Hall accounts compared with the 2018/19 which included the bar trading accounts. As usual the accounts for the operation of the Village Hall are lodged with the Charities Commission. However, as MVHTL is a limited company, its annual accounts are posted with Companies House.
With the bar income accounted for separately, the Village Hall income in 2019/20 amounted to £11,387 which included £7,829 covenanted from MVHTL. Hall bookings were again down on the previous year, amounting to just £2,874 compared with £4,439 the previous year. Three weeks of booking fees were lost due to the hall having to close in March 2020 due to the corona virus pandemic but the overall downward trend in bookings which was apparent in 2018/19 has continued year-on-year. Village Hall expenditure in 2019/20 was £12,935, contributing to a loss of £1,548 in the financial year, compared to a loss of £616 in 2018/19. Total expenditure in 2018/19 was £30,022 but this included the bar operation which is not included in the 2019/20 results.
Despite being closed for the entire 2020/21 accounting period as a result of the Covid pandemic, the Village Hall made a operating profit of £3,018 thanks to a Covid grant of £10,000 from the local authority. This enabled the Hall to cover ongoing costs for electricity, background heating, and deep cleaning despite not having any booking income. See accompanying report for full details.
The bar operating subsidiary, Metfield Village Hall Trading Ltd also had no income during 2020/21 and consequently made a loss of £988 due to the combination of bar stock wastage and accountancy fees. As a result there were no profits to covenant to the Village Hall. See accompanying accounts.
The Village Hall finally re-opened in mid-July 2021 after 16 months closure due to the Covid pandemic. As the hall was open just over eight months during the financial year inevitably annual income was hit compared with previous years. This was compounded by a reduction in the grants available post-Covid. In addition some regular hire bookings ended, notably Tots ‘n Toys shutting down as the latest cohort of Metfield toddlers headed off to school. As a result income for the financial year to end-March 2022 was £5,240 while total expenditure was £13,495, resulting in an operating loss of £8.255. This was covered from financial reserves.
The bar operating subsidiary, Metfield Village Hall Trading Ltd made a profit of £2,846 on operations from 17 July 2021 to March 31 2022. The Covenanted Donation from Metfield Village Hall Trading Ltd to Metfield Village Hall was calculated as £1,396 as the bar operation had made a loss in the previous financial year due to the Covid shut-down (see above) which had to be accounted for.
Village Hall income for the financial year 2022/23 totalled £7,968 compared with £11,387 in 2019/20 which was the last full year of operation (the Hall was only open for only 8 1/2 months in 2021/22 and was closed for the whole of 2020/21 due to Covid). However, excluding the covenanted income contribution from Metfield Village Hall Trading Ltd, Village Hall income in 2022/23 was £4,186 which is an improvement on the equivalent total of £3,558 in 2019/20.
However, with expenditure in 2022/23 totalling £11,702 the Village Hall again made an operating loss of £3,734 which was covered from reserves. While disappointing this represents a 121% improvement on the loss of £8,255 in 2021/22.
The bar operating subsidiary, Metfield Village Hall Trading Ltd, had a turnover of £8,454 in the year to 31st March 2023 which after costs resulted in a gross operating profit of £4,388. After admin expenses including accountancy fees and bank charges, this enabled a covenanted donation of £3,782 to be made to the Village Hall. This compares with a covenanted donation of £7,829 in the last full 12 month operating period of financial year 2019/20 and reflects a significant downturn in bar trade as a result of changes in socialising habits following the Covid pandemic compounded by the ongoing cost of living crisis.
This downturn in takings from the Friday night bar opening means that the financial logic for setting up Metfield Village Hall Trading Ltd no longer applies. The Trustees originally set up the trading company on the advice of van Dijk accountants because the Village Hall could have been liable to pay corporation tax if our small trading turnover (ie turnover not covered by the Hall’s charity constitution such as running a bar not otherwise connected with a village hall event) exceeded £8,000 a year. In the early years of running the bar this was a possibility but in the last financial year most of our bar turnover of £8,454 was derived from village hall events such as the fete, funerals and weddings, so looking purely at turnover from the bar where there is no village hall event, we are well inside the corporation tax small trading allowance. As a result the village hall Trustees have decided to close down Metfield Village Hall Trading Ltd once alternative banking processes have been arranged. From financial year 2024/25 this will save ongoing annual administration costs in running the trading company which in 2022/23 amounted to £615.