Charities have to file key documents with us within 10 months of the end of their financial year. It’s a legal requirement, yet a quarter of all charities continue to miss this deadline and file late. These charities have a combined annual income of £6 billion – a massive chunk of charity money not accounted for on time. Many who do comply only file in the last month possible.
With a significant public interest in charity accountability, charities simply have to do better. Our online register is changing, making it easier for visitors to see which charities have filed promptly and which are overdue. Please visit our website at www.charitycommission.gov.uk. Charities have a responsibility to be transparent and tell the public about what they are achieving and the impact they are making. Those who continue to file late do themselves no favours – with the donating public, with funders or with us.
Annual reports and accounts filed with us are the authoritative source of information about individual charities and the wider charitable sector. This information is used by funders, donors, researchers and the public. It forms the basis of leading sector analysis - including the NCVO Almanac, GuideStar’s database and CAF's donor site.
This guidance contains some practical tips and signposting information. Please read it and pass it on to those who are directly responsible for preparing your accounts and trustees’ reports.
Our challenge to you is to raise your game and file in good time.
Chief Executive, Charity Commission.
What you must submit depends on your income and/or expenditure in the relevant period.
Charities with a financial period starting before 27th February 2007
The law requires registered charities whose annual income or expenditure exceeds £10,000 to file their Trustees' Annual Report and accounts with the Charity Commission.
Charities with a financial period starting on or after 27th February 2007 and ending on or before 31st March 2009
The law requires registered charities whose annual income exceeds £10,000 to file their Trustees' Annual Report with the Charity Commission.
Charities with a financial period ending on or after 1st April 2009
The law requires registered charities whose annual income exceeds £25,000 to file their Trustees' Annual Report and accounts with the Charity Commission.
The law also requires charities whose annual income exceeds £10,000 to submit an Annual Return to the Charity Commission.
All documents must be submitted no later than 10 months from the date of the relevant financial year end.
• it says a lot about the way your charity is run – annual accounts and trustees’ reports are the window through which charities are viewed by those who fund them and by the wider public. Quality accounts and reports, filed promptly, are eloquent testimony to robust administration and effective trusteeship.
“It’s simple: for information to be valuable it needs to be relevant, accurate and timely. Filing your accounts with a well reasoned report demonstrates that your charity is run effectively. Bad news is often seen as a reason to delay filing, but bad news from a well-managed charity should strengthen the case for support if well communicated.
All charities should aim to file accounts within six months. The Children's Society has been working to reduce its timescale and will file within six months in 2006 and aims to beat that in 2007.” Charles Nall, Corporate Services Director, The Children’s Society.
• it may help you access funding – public bodies and charitable foundations provide a significant proportion of the sector’s income and both the content and timeliness of accounts and reports can be a key element in their funding decisions. As information about charities becomes ever easier for the public and the media to access, the transparency of financial reporting will increasingly influence donor behaviour. The time within which accounts and reports are filed is one of the simplest ways in which the public accountability of charities can be compared.
“Donors want to understand what a charity is doing so they can take an informed decision about giving. CAF’s website relies on Charity Commission data to inform donors and timely submission can be a key factor in a donor’s decision to give.” Stephen Ainger, Chief Executive, Charities Aid Foundation.
• it tells your story and that of the sector you are part of – to be accountable to their funders, beneficiaries and the wider public, charities should seek to make information available as close as possible to the events to which it relates. A well-framed report and clear accounts, promptly filed, are persuasive evidence of a well-run charity that deserves support. The information in accounts and reports is increasingly being used by charities and other organisations to analyse, add value and better understand the environment in which charities are operating. Our understanding of the sector is only as good and as up to date as the information that underpins it. Timely submission helps to ensure that the sector barometers are up to date and accurate.
“Effective honorary treasurers, from charities both large and small, view prompt filing of their charity’s accounts as a clear sign of the general financial health of their charity.” Leslie Jones, Director, Charity Treasurers’ Forum.
• you can gain credit and avoid criticism – many charities consistently file accounts and reports well in advance of the 10 month deadline. This deserves recognition and the Commission now gives much greater prominence to compliance history on its online Register of Charities. It is easy to identify good and bad performers. Charities which file late are inevitably exposed to an increasing risk of negative publicity.
“It is important that a charity plans its accounting timetable to spread the workload over the year in order to speed up the production of the annual report and accounts at the year end. The annual report and accounts should be seen as an opportunity to market the charity and inform stakeholders of recent progress; the key word being recent.” Keith Hickey, Chief Executive, Charity Finance Directors’ Group.
For charities submitting documents for a financial year ending on or after 1st April 2009 the following table sets out what you must file. As outlined above, the requirements differ for charities with an earlier financial year-end date.
Trustees' Annual Report & Accounts
Small charities with an annual income of £10,000 or less just need to complete an Annual Update form which states their income, expenditure and changes in trustees. These charities do not normally have to submit their accounts to the Charity Commission but they must send them if the Commission or a member of the public asks for them.
Other charities need to send:
The Trustees’ Annual Report explains what the charity sets out to do, how it goes about it and what was achieved during the year. The accounts provide the financial detail.
The Trustees’ Annual Report should be attached to the accounts and read in conjunction with them as it gives meaning to the numbers.
Careful planning is the key to producing a timely, good quality trustees’ report and set of accounts. Successful charities prepare a timetable well before the year end and make key decisions before the process of preparing the accounts starts.
Charities also need to be clear about who is taking responsibility for filing. The responsibility for filing rests with the trustees. If you expect your staff, auditors or independent examiners to file on your behalf then make sure this responsibility is communicated, recorded and clearly understood.
Delays in filing documents often occur because of the timing of an Annual General Meeting (AGM). Incorporated charities do not have to lay accounts before a general meeting or have them agreed by the Inland Revenue before sending them to Companies House. Similarly, there is no need to wait for the AGM before filing with the Commission.
For unincorporated charities, unless their governing document specifically requires adoption or approval of reports and accounts at the AGM, and in our experience very few governing documents require this, there is no need to wait for the AGM before filing documents with us.
Many charities do not have the resources to employ dedicated finance staff and the Commission offers a range of practical advice and guidance to help charities file their documents early.
We will send you notification that your charity’s Annual Return form is ready to complete as close to your year end as possible. You can complete your return online and submit accounts electronically or you can request a paper form from us. This is a quick and easy process. Go to the Online Services homepage.
As part of our commitment to improving transparency, we will ensure information held about charities on our Register is up to date and easily accessible. We aim to record receipt of your documents within a few days of your submission. If you file online, your Register entry is updated even more quickly, usually within 24 hours. A few days after filing your returns we recommend you check that your charity’s entry on the web Register is accurate. If you have not filed your documents early you will receive a reminder from us that your deadline is approaching.
If you need help with completing your returns, please contact us.
Our website has specific guidance on preparing accounts and meeting reporting requirements. Small charities may find our packs (CC16 for Receipts and Payments Accounts and CC17 for Accruals Accounts) helpful when preparing their trustees’ annual report and accounts. These packs provide trustees with a simple layout for both the annual report and accounts.
For more information, follow the links to these links to the charity accounting and reporting homepage.
We also have example accounts and reports available on our website and you may find these useful when planning and designing your own. We also produce a wide range of publications relating to charity law, regulation and best practice. Additional information and details of other organisations that can help and sources of information can be found in useful links.
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