All charities, unless exempt, are legally required to report The Charity Commission on their income and expenditure, by way of an Annual Return.
Exactly what you are required to submit, as a charitable company or unincorporated organisation, will depend on your annual income as follows:
- Under £10,000: report income and spending, via Annual Return
- Between £10,000 and £25,000: as above, but requirement to answer additional questions about the charity as part of the Annual Return
- Above £25,000: as well as answering additional questions as part of the Annual Return, you will need to get your accounts independently checked and provide copies of your trustee annual report, accounts, and independent examiner’s or auditor’s report.
Requirements differ again slightly if you are operating a Charitable Incorporated Organisation (CIO), and an outline of these can be found here.
It’s perhaps also worth bearing in mind that the Annual Return is not the same as a Charity Tax Return or annual accounts.
Transparency to gain public trust
The Annual Return and reporting required of charities supports the Charity Commission’s regulatory aims and is an opportunity for organisations to be transparent about and accountable for their activities.
This publicly available information can be paramount to gaining the trust and support of the public and donors.
The future of the Charity Annual Return
The Charity Commission’s latest annual report and business plan details their intentions to reshape some of the questions asked as part of the Annual Return.
This, it hopes, will give them access to more of the data they need to regulate effectively, and data that will continue to serve the public in helping them to make informed choices about which charities they engage with.
We talk about some of the changes being proposed in a previous article here.
Annual Return and Report: Getting it right
Given the importance of the Annual Return and reporting for charities, it’s vital that you get it right. Here are a few things you should consider, when it comes to submitting your charity’s Annual Return:
- Understand your obligations – you should know what you are required to submit, per the income bands detailed earlier, and when your submission should be provided to The Charity Commission. The Annual Return must be submitted within 10 months of the end of your financial year.
- Be accurate and be prepared – you may find it useful to familiarise yourself with the questions on the annual return, before you begin to fill it out, so that you can pull together any reference documentation you might need.Sufficient preparation can also help you to ensure that the information you are providing is accurate.
- Ask your accountant – If you are in doubt about what is required of your charity, or you are concerned about completing your Annual Return, talk to one of our charity accountants here at George Hay about the ways in which we can support you to get it right.
Supporting charities, CIOs, and unincorporated organisations
At George Hay, our team of charity accounting specialists support charities, CIOs, and unincorporated not-for-profit organisations to meet their statutory reporting obligations.
Beyond this, we take an advisory approach to working with the third sector; whether helping you to understand your role, or to appraise and strengthen governance overall – our practical advice is designed to help you operate compliantly, achieve financial stability and work towards your core objectives.
To discuss your charity’s accounting, audit, or advisory needs with one of our charity accounting professionals, contact us today.