The Charity Commission has recently said there are no excuses for not filing accounts as it is the key to transparency and public trust in charities. They have also reported that nearly one third of charities’ accounts filed are of unacceptable quality. They are about to launch a campaign to target charities in default.

Good Governance is the key to any good charity; trustees must understand their duties and responsibilities. The Charity Commission’s The Essential Trustee (cc3) is an essential read for trustees both new and old. Being familiar with your charitable objectives, ensuring you operate in accordance with them and complying with the following conditions will help ensure you keep on the right side of the Charity Commission.

Filing Responsibilities

If your charity’s income is over £25,000 or you are a Charitable Incorporated Organisations (CIO) then you need to file accounts along with an annual return at the charity commission within 10 months of the year end. (If it is a charitable company then the accounts need filing at Companies House within 9 months)

An audit is required if your charity’s income is over £1m (up to 31/3/15 £500,000) or your total assets exceed £3.26m & your gross income is more than £250,000.

An Independent examination is required when your income is between £25,000 - £999,999. If your income is above £250,000 then that examination needs to be carried out by a qualified accountant.

Accounts presentation

Charity accounts have special rules for their preparation called Statements of Recommended Practice (SORP). In 2016 we see the introduction of two new SORP, SORP FRS102 & SORP FRSSE. Unfortunately the FRSSE SORP which has special rules for small charities is going to be withdrawn. Keep watching the charity sorp website (charitysorp.org) for developments and have discussions with your professional adviser to decide which SORP is appropriate for your Charity.

And finally, remember Income must always be reported gross, even if you receive a grant for a capital project this must be shown as income and the cost shown as expenditure on fixed assets.

Recent publicity on high profile Charity failures has emphasised the need to get governance and compliance issues right and the Charity team at JWPCreers can help guide you through the maze of regulations and legislation.

Please contact Andrew Johnson on 01904 717260 or email him at faj@jwpcreers.co.uk