The trustees present their annual report and financial statements for the year ended 31 March 2025.
The financial statements have been prepared in accordance with the accounting policies set out in note 1 to the financial statements and comply with the charity's memorandum and articles of association, the Companies Act 2006 and "Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (effective 1 January 2019)".
The Trustees’ Report incorporates the Directors’ and Strategic Report as required by Company Law.
Imagine Independence is a leading third sector organisation, passionate about supporting people with mental health, neurodiversity, learning disabilities and or autism to live fulfilled lives within the community.
Our purpose is to enrich the lives of people we support, ensuring they live fulfilling and rewarding lives. To achieve our purpose, we ensure the people we support are fully engaged in their care and support, as we believe they are best placed to advise on what support and services will make a positive difference to their lives. Socially inclusive practice is the golden thread that runs through all services.
Our values statement “Valuing People, Challenging Stigma, Transforming Lives” informs everything we do.
We positively recruit people who have personal experience of mental health problems as we believe they can walk by the side of people we support, sharing the wisdom of their recovery journeys to support others.
Our greatest asset is our workforce. Every day our staff and volunteers generously share their experiences, knowledge and talents with the people they support. Through their focused dedication to Imagine’s mission, and the courage to challenge the status quo, people feel valued. They know they are making both the “everyday” and the “extraordinary” become possible for everyone. They walk alongside the people they have the privilege to serve, helping them to transform their lives, one day at a time. And they never give up.
Services are principally funded by public sector organisations, including health bodies and local authorities.
The trustees have paid due regard to guidance issued by the Charity Commission in deciding what activities the charity should undertake and have operated in accordance with the relevant Imagine governance documents.
The description under the headings "Achievements and performance" and "Financial review" meet the company law requirements for the trustees to present a strategic report.
This report includes a further year of financial challenge across the whole of the health and social care sector, including Imagine with the higher than forecast level of inflation and some funders not being able to award inflationary uplifts to meet rising costs.
The challenges ahead include the National Insurance Contribution increasing to 15% and the National Living Wage increasing by 6.7% for people aged 21 and over. Our business strategy includes speaking to commissioners regarding rising costs, reviewing staffing models and central costs to make efficiencies and working with sector bodies to lobby central government.
We have made some improvement regarding recruiting and retaining staff and reducing agency costs, however these areas remain challenging.
We have continued to invest in improving systems, processes, and team capacity to ensure we are equipped to deliver current services and scale effectively.
Imagine has recently completed business planning. We have a Medium -Term Business and Operational Plan, actions include : -
Strengthening service user involvement
Further embedding Social Inclusion
Strengthening Environmental Sustainability
Strengthening Internal and External Communication
We have revised our audit tool. The new audit tool provides quantitative and qualitative data on service’s performance recognising the need to check both compliance with Health Support Chain Association (HSCA) regulation and on the priorities that we have set as an organisation regarding, service user involvement, social inclusion, sustainability and continuous improvement.
We have secured new business and have secured places on the following Frameworks: -
Merseyside HASS (Housing Accommodation Support Service) – commissioned by NHS
Greater Manchester Supporting People to Live Well at Home Flexible Purchasing System – utilised by various GM NHS and local authority bodies within the following categories
Learning disabilities
Neurodivergent
Complex mental health
Complex lives
Sefton Social Inclusion Service – 12 months contract secured.
Imagine made an overall deficit of £106,946 in 2024/25 (compared to a deficit of £230,662 in 2023/24). Last year we reported that the deficit was predominantly due to the additional costs resulting from employing agency staff in our services. We have made considerable steps in addressing this during 2024/25 reducing overall agency usage by nearly 30%.
Whilst disappointing that there has been a further deficit in 2024/25, it is broadly as budgeted and reflects the increased turbulence across the health and social care sector. The Executive Management Team, under new leadership, is focusing on the long-term financial sustainability of the organisation reviewing the viability of our existing direct services, bidding for new contracts and benchmarking our corporate and management costs to ensure value for money.
Despite the deficit, the organisation’s total reserves were £1,654,126 at 31 March 2025, of which £889,665 relates to free reserves, compared to £1,761,072 at 31 March 2024 (free reserves £974,819) which is considered sufficient.
The prior year figures have been adjusted which has significantly increased the 2023/24 deficit, which is now £230,662, more detail is shown in note 23.
Reserves policy
It is the policy of the charity that unrestricted funds which have not been designated for a specific use or invested in fixed assets should be maintained at a level equivalent to a minimum of 10% of gross income. The trustees considers that reserves at this level will ensure that, in the event of a significant drop in funding, they will be able to continue the charity’s current activities while consideration is given to ways in which additional funds may be raised. The free reserves as a percentage of 2024/25 turnover is 7.4% and, whilst this is not considered to be a significant shortfall on the approved policy, it has been noted and is subject to review at each meeting of the Finance and Performance Committee.
Whilst the overall balance sheet and financial standing remains adequate, we have continued to face delays in getting payments from some of our commissioners. In recent years the operations that Imagine deliver have increased in complexity and we now support people with greater needs and consequently, individually the funding is of a higher value. In addition, a number are through county-wide Frameworks and each placement is funded differently. During 2024/25 we have continued to improve our processes to ensure new packages are promptly added to the relevant Commissioner new processes were implemented to ensure that most packages were added to Commissioners’ portals promptly. However, there remain a small number of placements that require further review.
It is important to note that, unlike traditional businesses, Imagine, as a social care charity, does not consider it an appropriate option to terminate the support for an individual because of slow or late payment.
The complete results for the year and the charity’s financial position at the end of the year are shown in the attached financial statements.
Risk policy
The Board’s review of risk continues to be broadly based on the key risks shown below. The register is supported by detailed operational policies and procedures which are regularly reviewed internally and externally audited. The corporate risk register comprises four themes:
Theme 1 – Operational Risks
Theme 2 – Quality/Governance Risks
Theme 3 – Financial Risks
Theme 4 – Business Risks
The trustees assess all identified and potential risks together with the actions proposed to mitigate the impact on Imagine. The Risk Register is divided into three sections including Operations, Finance and Governance and Business Systems. The board have focused on the highest scoring risks in each area which are listed below:-
Key Risk Operations – Not having appropriately trained and high performing staff in appropriate positions.
Controls in place include having safer recruitment practices, corporate and local induction processes, full training pathways, monitoring of training undertaken.
Key Risk Finance – Inadequate level of general unrestricted reserves.
Controls in place include budget monitoring at Board and SMT level, prompt and decisive actions to address non-viable services.
Key Risk 3 – Governance and Business Systems – Inadequate governance structure and processes.
Control in place include Memorandum of Articles reviewed annually, Key Risk Register Statement regularly reviewed, investment in training and development of Trustees.
The implications, various actions and responsibilities linked to these risks have been considered and documented by the Board during 2024/25.
The trustees have assessed the major risks to which charity is exposed, and are satisfied that systems are in place to mitigate exposure to the major risks.
Our approach to Growth – Over the next 5-10 years, there will be three main elements of our new strategy, all contributing to our core objectives of helping those we work with live their best lives which are keeping true to our values, enhancing our capabilities, expanding our reach.
Our key aim is to grow our income base to take advantage of scale efficiencies and to diversify our income sources to reduce reliance on single streams.
We will:
Continue to deliver high quality services to ensure we are re-commissioned for those services we want to keep when current contracts end.
Explore fee uplifts from commissioners where fees have not been automatically updated.
Build strong relationships with commissioners demonstrating impact through case studies.
Tender for appropriate services where there are opportunities to take on additional support packages in areas we operate in that can provide sufficient margins and contribute to management and central costs.
We will consider applying to join Supported Living Frameworks in areas we operate in, where the fee rate allows for all service costs to be covered.
Explore grant opportunities as they arise.
Equality and Diversity
We recognize that Equality, Diversity and Inclusion (EDI) work requires sustained effort, and high-level commitment. Our EDI work is therefore being led and overseen personally by our CEO, with active engagement of our Board, staff, service users, their families, and other stakeholders.
Environmental Issues
The Board is mindful of the organisation’s environmental impact. Our environmental policy and strategy will be reviewed which will align with our commitment to reduce the environmental impact of services.
Employment and Training
Imagine is dedicated to providing exceptional person-centred care by cultivating a thriving, well-supported, and skilled workforce empowered to meet diverse client needs. We will review our training pathways, continue to invest in to Train the Trainer programmes and co-produce a number of training sessions.
Improving Business systems
Good progress continues to be made in the implementation of the People HR system, which will significantly enhance our ability to manage workforce data, streamline HR and recruitment processes, and ensure compliance with reporting requirements.
Lone Working System – Orbis:
We are rolling out a new lone worker safety app, which will be mandatory for Support and Senior Support Workers.
Telephony & Internet:
We are planning to undertake a full review of telephony which will include exploring the potential to phase out landlines in favour of MS Teams.
IT System improvements currently underway include:
Multi-Factor Authentication (MFA): Scheduled for implementation shortly.
SharePoint Migration
Internet Upgrades
Device Upgrades
The charity is a company limited by guarantee and is governed by its Memorandum and Articles of Association.
The trustees, who are also the directors for the purpose of company law, and who served during the year and up to the date of signature of the financial statements were:
None of the trustees have any beneficial interest in the company. All of the trustees are members of the company and guarantee to contribute £1 in the event of a winding up. The Board of Directors are the charity’s trustees. All Directors give of their time freely and no Director received remuneration in the year. Details of Directors’ expenses and related third party transactions are disclosed in the notes to the accounts.
Our trustees are recruited by direct approach, recruitment advertising or word of mouth. On appointment, all new trustees meet with relevant staff to receive a full induction into the operations and governance of Imagine. In addition, they are given access to the dedicated trustee database of meeting reports and minutes and other key documents. Ongoing development is supported through visits to services and invitations to attend our regular management training events.
The full Board meets on a quarterly basis to consider policy, strategy and corporate governance. In the week prior to the Board, the Finance and Planning Committee meet to review the financial position of the charity and have responsibility for the overview and monitoring of strategic financial planning, corporate governance and budgetary processes. These timetabled meetings are supplemented by additional meetings to consider budget-setting and, if necessary, to finalise the accounts.
We are in the process of recruiting one new Trustee and are planning to recruit other Trustees to fill skill gaps, following this we will review committee structures.
Formal trustee meetings are held in person, however there is the opportunity to join online via Teams. Meetings are attended by members of the charity’s Executive Management Team. Elaine Mather is CEO and Company Secretary.
Pay Policy for Senior Staff
The Senior Management Team (SMT) is comprised of the key management personnel of the charity, who are responsible for directing and controlling, running and operating services on a day-to-day basis. The pay of the SMT is reviewed annually, at the same time as the pay of all staff is considered. In view of the financial pressures on the organisation from the public sector austerity measures, it is not considered appropriate for any automatic uprating of salaries in line with any index. Salary levels are considered in the context of the recruitment pressures, statutory guidance, financial performance, budgetary projection and the overall financial health of the charity. During 2024/25, senior managers received a percentage salary increase in line with that awarded to all other staff.
Contingent liabilities
Contingent liabilities continue to be an issue, which are a matter of discussion between Imagine and the Pensions Trust. As stated in previous reports, the deficit is small and represents a technical deficit only, with no immediate prospect of a call on charitable funds to supplement the Pension Trust’s assets. This is monitored throughout the year when new information is made available and when a new actuarial valuation/funding statement is issued.
Conclusion
This report reflects a year of continuing challenge for Imagine. It is pleasing to note that, as a result of the improvements achieved in recent years, the staffing resources and financial standing of the charity have proved robust enough to meet these challenges.
The trustees warmly acknowledge and thank staff, volunteers and the people being supported for their individual contributions to Imagine’s work.
In accordance with the company's articles, a resolution proposing that Mitchell Charlesworth (Audit) Limited be reappointed as auditor of the company will be put at a General Meeting.
The trustees' report, including the strategic report, was approved by the Board of Trustees.
The trustees, who are also the directors of Imagine Independence for the purpose of company law, are responsible for preparing the Trustees' Report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
Company law requires the trustees to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the charity and of the incoming resources and application of resources, including the income and expenditure, of the charitable company for that year.
In preparing these financial statements, the trustees are required to:
- select suitable accounting policies and then apply them consistently;
- observe the methods and principles in the Charities SORP;
- make judgements and estimates that are reasonable and prudent;
- state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and
- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charity will continue in operation.
The trustees are responsible for keeping adequate accounting records that disclose with reasonable accuracy at any time the financial position of the charity and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the charity and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Opinion
We have audited the financial statements of Imagine Independence (the ‘charity’) for the year ended 31 March 2025 which comprise the statement of financial activities, the balance sheet, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion, the financial statements:
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the charity in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
In auditing the financial statements, we have concluded that the trustees' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the charity’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the trustees with respect to going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The trustees are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the trustees' report for the financial year for which the financial statements are prepared, which includes the directors' report and the strategic report prepared for the purposes of company law, is consistent with the financial statements; and
the strategic report and the directors' report included within the trustees' report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the charity and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report included within the trustees' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of trustees' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
As explained more fully in the statement of trustees' responsibilities, the trustees, who are also the directors of the charity for the purpose of company law, are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the trustees are responsible for assessing the charity’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the trustees either intend to liquidate the charitable company or to cease operations, or have no realistic alternative but to do so.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
we identified the laws and regulations applicable to the company through discussions with directors and other management;
we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006, taxation legislation and data protection, anti-bribery, employment and health and safety legislation;
we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and
identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
To address the risk of fraud through management bias and override of controls, we:
performed analytical procedures to identify any unusual or unexpected relationships;
tested journal entries to identify unusual transactions;
assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and
investigated the rationale behind significant or unusual transactions.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
agreeing financial statement disclosures to underlying supporting documentation;
reading the minutes of meetings of those charged with governance; and
enquiring of management as to actual and potential litigation and claims.
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Use of our report
This report is made solely to the charitable company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the charitable company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charitable company and the charitable company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Charitable activities - Income
Charitable activities - Expenditure
The statement of financial activities includes all gains and losses recognised in the year.
All income and expenditure derive from continuing activities.
Imagine Independence is a private company limited by guarantee incorporated in England and Wales. The registered office is 25 Hope Street, Liverpool, L1 9BQ.
The financial statements have been prepared in accordance with the charity's memorandum and articles of association, the Companies Act 2006 and "Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (effective 1 January 2019)". The charity is a Public Benefit Entity as defined by FRS 102.
The financial statements are prepared in sterling, which is the functional currency of the charity. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
At the time of approving the financial statements, the trustees have a reasonable expectation that the charity has adequate resources to continue in operational existence for the foreseeable future. Thus the trustees continue to adopt the going concern basis of accounting in preparing the financial statements.
Unrestricted funds are available for use at the discretion of the trustees in furtherance of their charitable objectives.
Designated funds comprise funds which have been set aside at the discretion of the trustees for specific purposes. The purposes and uses of the designated funds are set out in the notes to the financial statements.
Restricted funds are subject to specific conditions by donors or grantors as to how they may be used. The purposes and uses of the restricted funds are set out in the notes to the financial statements.
Cash donations are recognised on receipt. Other donations are recognised once the charity has been notified of the donation, unless performance conditions require deferral of the amount. Income tax recoverable in relation to donations received under Gift Aid or deeds of covenant is recognised at the time of the donation.
Income from grants, including capital grants, and contract income is included in income when these are receivable, except as follows:
When donors specify that donations and grants given to the charity must be used in future accounting periods, the income is deferred until those periods.
When donors impose conditions which have to be fulfilled before the charity becomes entitled to use such income, the income is deferred and not included in income until the preconditions for use have been met.
When donors specify that donations and grants, including capital grants, are for particular restricted purposes, which do not amount to preconditions regarding entitlement, this income is included in income of restricted funds when receivable.
Voluntary income includes discretionary grants for projects, goods and services where no service agreement or contract exists.
Other grants, which have particular service requirements and which are provided in accordance with a contract or service level agreement are included in the statement of financial activities under the heading charitable activities.
Expenditure reflects all amounts paid and accrued during the year. Expenditure includes any VAT which cannot be fully recovered, and is reported as part of the expenditure to which it relates. All costs are allocated between the expenditure categories of the statement of financial activities (SOFA) on a basis designed to reflect the use of the resource.
Charitable expenditure
Charitable expenditure comprises those costs incurred by the charity in the delivery of its activities and services for its beneficiaries. It includes both costs that can be allocated directly to such activities and those costs of an indirect nature necessary to support them. Governance costs and support costs are allocated to charitable activities in the SOFA based on the following allocation method
Senior management salary costs - staff time
Senior management employer's costs - staff time
Employer costs - staff time
Premises expenses - use of location
Office running costs - usage of items
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
All assets costing more than £500 are capitalised at cost.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the statement of financial activities.
At each reporting end date, the charity reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts.
The charity has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the charity's balance sheet when the charity becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Basic financial liabilities, including creditors and bank loans are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of operations from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Financial liabilities are derecognised when the charity’s contractual obligations expire or are discharged or cancelled.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the charity is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
The cost of providing benefits under defined benefit plans is determined separately for each plan using the projected unit credit method, and is based on actuarial advice.
The change in the net defined benefit liability arising from employee service during the year is recognised as an employee cost. The cost of plan introductions, benefit changes, settlements and curtailments are recognised as incurred.
The net interest element is determined by multiplying the net defined benefit liability by the discount rate, taking into account any changes in the net defined benefit liability during the period as a result of contribution and benefit payments. The net interest is recognised in income/(expenditure) for the year.
Remeasurement changes comprise actuarial gains and losses, the effect of the asset ceiling and the return on the net defined benefit liability excluding amounts included in net interest. These are recognised immediately in other recognised gains and losses in the period in which they occur and are not reclassified to income/(expenditure) in subsequent periods.
The net defined benefit pension asset or liability in the balance sheet comprises the total for each plan of the present value of the defined benefit obligation (using a discount rate based on high quality corporate bonds), less the fair value of plan assets out of which the obligations are to be settled directly. Fair value is based on market price information, and in the case of quoted securities is the published bid price. The value of a net pension benefit asset is limited to the amount that may be recovered either through reduced contributions or agreed refunds from the scheme.
Taxation
The charity benefits from various exemptions from taxation afforded by tax legislation and is not liable to corporation tax on income or gains falling within those exemptions. Recovery is made of tax deducted from qualifying income and from receipts under Gift Aid. The charity is not able to recover Value Added Tax. Expenditure is recorded in the accounts inclusive of VAT.
In the application of the charity’s accounting policies, the trustees are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Bad and Doubtful Debts
Trade Debtors are recorded at their estimated realisable value. The recoverability of these debts is subject to various external influences such as the economic environment as well as more tangible factors such as the age of the debt. The trustees estimate what value of these debts is likely to be irrecoverable and then maintain an ongoing provision.
Grants receivable
Charitable activities - Income
Promoting independent lives
Income from charitable activities
Service funding
Charitable activities - Expenditure
Promoting independent lives
Other staff costs
Travel
Premises and office costs
Service costs
Other
Bank charges
General expenses
The analysis of auditor's remuneration is as follows:
None of the trustees (or any persons connected with them) received any remuneration or benefits from the charity during the year. No expenses were paid to trustees in the year (2024 £nil) .
The average monthly number of employees during the year was:
Included in wages and salaries are termination payments of £21,363 (2024: £12,844) and payments to agency staff and temporary workers of £583,343 (2024: £818,527).
Deferred income is included in the financial statements as follows:
Included in deferred income are receipts which relate to a future accounting period and will be recognised to match the delivery of the service.
The charity operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the charity in an independently administered fund.
The charge to the statement of financial activities in respect of defined contribution schemes was £183,914 (2024 - £183,261).
The company participates in the scheme, a multi-employer scheme which provides benefits to some 638 non-associated participating employers. The scheme is a defined benefit scheme in the UK. It is not possible for the company to obtain sufficient information to enable it to account for the scheme as a defined benefit scheme. Therefore it accounts for the scheme as a defined contribution scheme.
The scheme is subject to the funding legislation outlined in the Pensions Act 2004 which came into force on 30 December 2005. This, together with documents issued by the Pensions Regulator and Technical Actuarial Standards issued by the Financial Reporting Council, set out the framework for funding defined benefit occupational pension schemes in the UK.
The scheme is classified as a 'last-man standing arrangement'. Therefore the company is potentially liable for other participating employers' obligations if those employers are unable to meet their share of the scheme deficit following withdrawal from the scheme. Participating employers are legally required to meet their share of the scheme deficit on an annuity purchase basis on withdrawal from the scheme.
A full actuarial valuation for the scheme was carried out at 30 September 2023. This valuation showed assets of £514.9m, liabilities of £531.0m and a deficit of £16.1m. To eliminate this funding shortfall, the Trustee has asked the participating employers to pay additional contributions to the scheme as follows:
Deficit contributions
From 1 April 2025 to 31 March 2028: | £2,100,000 per annum (payable monthly) |
Unless a concession has been agreed with the Trustee the term to 31 March 2028 applies.
Note that the scheme’s previous valuation was carried out with an effective date of 30 September 2020. This valuation showed assets of £800.3m, liabilities of £831.9m and a deficit of £31.6m. To eliminate this funding shortfall, the Trustee asked the participating employers to pay additional contributions to the scheme as follows:
Deficit contributions
From 1 April 2022 to 31 January 2025: | £3,312,000 per annum (payable monthly)
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The recovery plan contributions are allocated to each participating employer in line with their estimated share of the Series 1 and Series 2 scheme liabilities.
Where the scheme is in deficit and where the company has agreed to a deficit funding arrangement the company recognises a liability for this obligation. The amount recognised is the net present value of the deficit reduction contributions payable under the agreement that relates to the deficit. The present value is calculated using the discount rate detailed in these disclosures. The unwinding of the discount rate is recognised as a finance cost.
At the reporting end date the charity had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
The unrestricted funds of the charity comprise the unexpended balances of donations and grants which are not subject to specific conditions by donors and grantors as to how they may be used. These include designated funds which have been set aside out of unrestricted funds by the trustees for specific purposes.
During a prior year the charity received a Just Giving donation of £20,699 and a legacy of £34,456 which have been earmarked for future service development. It was discussed last year and the decision was made that these projects will no longer be going ahead and therefore the funds have been released back to general unrestricted funds.
The remuneration of key management personnel was as follows:
During the year an amount of £3,000 (2024: £9,000) was paid to the partner of a member of key management for ad hoc administration work. The amounts paid were considered to be equal to the market rate for the services provided.
There were no other related party transactions in the year.
Imagine independence is incorporated under the Companies Act as a company limited by guarantee. The liability of the members is limited to £1.
Charitable activities - Income