Charity Commission proposes new annual return process

The Charity Commission is consulting on planned changes to next year’s annual return, including a new dynamic online updating facility, which it says are the most significant since 2013, and will address a number of issues identified in its recent reports

The consultation is the second part of a two-year project that is reviewing the key information that the Commission collects and displays from charities and is intended to minimise the amount of information that many charities have to send in each year, targeting questions instead at larger or more complex charities.

As part of this, the Commission is proposing to introduce a new annual return (AR18), plus a new update charity detail service which charities will use to inform the regulator about essential information, such as changes to their registered details, key activities and policies.

AR18 will consist of three elements. Part A is a set of regulatory questions (from now on, tailored to each charity) and confirmation that the data the Charity Commission holds about them on the register is accurate. Where the data is not accurate, the charity will need to correct it using the new update charity detail.

Part B is a series of questions on key financial aspects for charities with incomes over £500,000. Part C is the declaration of the submission of accurate data and options to upload accounts. This will be supported by the update charity detail service, which will allow charities to update their entry on the register throughout the year as changes happen so that the register remains accurate.

The update charity detail service will enable charities to complete an annual return and, where the charity’s details have been kept up-to-date, it will be necessary simply to confirm their accuracy. The online service includes so-called ‘triggers’ in the fundamental information which will be used to ensure the questions in the annual return that are tailored to their circumstances.

New questions

The consultation includes details of a number of new questions that will be included in AR18 which are intended to address issues which have been causing concern in recent years.

Charities will be asked how many grants they receive from central or local government, along with details of how many contracts they hold with either central or local government, as a way of highlighting those with an over-reliance on a single source of funding.

There are new questions about a charity’s arrangements with professional fundraisers, whether they have any trading subsidiaries, and how they make transfers of money overseas.

In response to concerns about the potential abuse of the gift aid system, charities will be asked to state how much gift aid they claimed during the financial period for that year’s annual return.

AR18 will ask for more detailed information about trustee payments, for both carrying out trustee duties and providing services to the charity, as well as any other material benefits that trustees may have received from the charity. The Commission says it wants to extend the questions to cover payments to employees who have been trustees, because of the potential for these to be made in breach of trust where prior authorisation has not been obtained in situations where trustees have recently become employees.

In addition, AR18 will introduce a new question asking charities to confirm if any of their staff receive a salary above £60,000 and, where they do, to ask two further questions to identify the number of staff being paid within salary bands above this figure, and about the pay of chief executives.

Helen Stephenson, chief executive of the Charity Commission, said: ‘We believe the changes that are proposed will help strengthen our ability to regulate charities and improve public trust and confidence. The improved digital service being offered will also result in a much easier service to use that is based on the needs of charities.

‘We are keen to hear from charities that complete the annual return, as well as users of our online register and those that have an interest in the information we collect and publish about charities.’
The Commission has set up an online survey for responses and will be holding a number of outreach events. The deadline for comments is 24 November.

The Commission says it will publish its analysis   of the feedback within three months of the end of the consultation, and aims to release AR18 by the end of March 2018. This will apply to charities’ financial years starting on or after 1 January 2018.

Annual return for 2018 - information collected from charities is here.

Pat Sweet |Reporter, Accountancy Daily [2010-2021]

Pat Sweet was the former online reporter at Accountancy Daily and contributor to the monthly Accountancy magazine, pub...

View profile and articles

Be the first to vote

Rate this article

Related Articles