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Annual returns to Charity Commission

06 March 2017 by Cecile Gillard and Kirsty Semple

Book extract: Annual returns to Charity Commission - read more

An exclusive extract from ICSA’s essential new book, Charity Law and Governance: A Practical Guide

All charities with an income above £10,000 that are registered with the Charity Commission must complete and submit an annual return to the Charity Commission. The annual return is made up of a number of parts. The parts that need to be completed will depend upon the charity’s income in the financial period that is being reported on.

Whilst charities with an income of £10,000 or less in the reporting period are not required to complete an annual return, they are asked by the Charity Commission to complete an annual update of the information that forms part of the charity’s entry on the Register. Charities with an income above £25,001 must also submit their annual report and accounts. It should be noted that although only charities with an income greater than £25,000 submit their trustees’ annual report and accounts to the Commission, all charities, regardless of their level of income, must prepare accounts and make these available to the Commission on request.

“Prior to 2014, charities with income of above £1 million also had to complete a much more detailed summary information return”

Annual returns and the trustees’ annual reports and accounts must be completed and submitted within 10 months of the end of the charity’s financial year. The Charity Commission publishes the compliance history of all charities on the register of charities. Much of the information given in annual updates and annual returns is made available on the Register of Charities, which is open to public inspection at the Charity Commission’s office and on its website. This does not include trustees’ addresses or dates of birth, but the names of the trustees, and summary data on the income and expenditure and financial history of the charity is available. Charities should regularly review their register entry to ensure that it is correct, and should bear in mind the data that is published when they prepare their annual report and accounts and the annual return.

Prior to 2014, charities with income of above £1 million also had to complete a much more detailed summary information return. This practice has ceased, although previous year’s returns are still available on the Charity Commission website. However, from 2015, all charities now have to answer more questions in the annual return and many of their answers will be published on the register. The new question areas included:

  • In the reporting period, how much income did you receive from:
    • contracts from central or local government to deliver services?
    • grants from central or local government? 

  • Does your charity have a policy on paying its staff? 

  • Has your charity reviewed its financial controls during the reporting period?

Charities are also encouraged to use the free text box to provide further information. The format for annual returns for 2016 onwards has also recently changed, but remains broadly similar to that for 2015. One core change is that charities now need to complete the return in two completely separate sections. They must firstly check and confirm that all of the details held by the Commission are up to date. They then must access a separate annual return. Also, the financial information required from charities with an income of £500,000 and over now reflects the changes needed as a result of the new Statement of Recommended Practice (SORP). In December 2016 the Charity Commission began a consultation on potential further changes to the annual
return format from 2017.

Cecile Gillard is a lawyer and specialist in company and charity law, and Kirsty Semple is Director of Semple Associates

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