1. Are annual accounts, trustees annual report and annual return the same thing?
No, each one is different.
Annual accounts as you may know, in simple terms, is the income and expenditure account and balance sheet (including notes) for a given year.
Annual accounts are normally accompanied in the front by trustees’ annual report which, among other things, gives a summary of the aim, objects, activities and plans of the charity.
Annual accounts and trustees’ annual report are most commonly produced as one document.
Annual return is a form that most charities must complete annually with information about changes in trustees, objects etc during the past 12 months.
2. What are the filing requirements for my charity’s accounts, trustees’ annual report and annual return?
CIOs – All Charitable Incorporated Organisations (CIO) irrespective of level of income, need to file annual accounts, trustees’ annual report and annual return with Charity Commission within 10 months from the end of the accounting year.
Charitable Companies – All charities that are also registered with Companies House irrespective of level of income, in addition to the above, need to also file annual accounts which include trustees’ annual report with Companies House within 9 months from the end of the accounting year. An annual return needs to be filed with Companies House at the anniversary of the date the company was incorporated.
Other – Charities that are neither CIOs nor charitable companies (i.e. only registered with Charity Commission), if the charity’s gross annual income exceed £25,000, need to file annual accounts, trustees’ annual report and annual return with Charity Commission within 10 months from the end of the accounting year.
If the charity’s gross annual income is below £25,000 but exceeds £10,000, the charity has obligation to file annual return with Charity Commission but not annual accounts.
If the charity’s gross annual income is below £10,000, the charity has no obligation to file annual return or annual accounts with Charity Commission.
Charity’s that are not legally required to file accounts or trustees’ report are advised by Charity Commission to prepare accounts and trustees’ report and make these available on request.
3. What are the filing deadlines for Charity Commission?
10 months from the accounting year end charities must file annual accounts, trustees’ annual report and annual return.
4. What are the filing deadlines for Companies House?
9 months from the accounting year end charitable companies must file annual accounts with trustees’ annual report.
Annual report must be filed on the anniversary of the date of incorporation
5. What should a trustees’ annual report include?
Charities not being audited should include information under the following headings (suggested by Charity Commission) in their annual report
Reference and administrative details of the charity, its trustees and advisers
Structure, governance and management
Objectives and activities
Achievements and performance
A financial review including a policy on reserves
Funds held as custodian trustee on behalf of others
Public benefit statement
Plans for future (optional)
6. Does our charity need an audit?
Answer these simple questions and decide if you require an audit or independent examination
When does your charity require an audit?
a. Does your Gross Income for the year exceed £1,000,000?
b. Does your Gross Income exceed £250,000 and Gross Assets exceed £3,260,000?
c. Do the trustees wish to have the financial statements audited?
d. Does the charity’s governing document require an audit?
e. Is an audit required by the Charity Commission or a funder?
If the answers to any of the above questions is YES an audit is required.
When does your charity require an independent examination?
Your answer to all of the above questions should be NO.
a. Is your Gross Income for the year between £25,001 and £1,000,000?
b. Do the trustees wish to have the financial statements independently examined?
c. Does the charity’s governing document require an independent examination?
d. Is an independent examination required by a funder?
If the answers to any of the above questions is YES an independent examination is required.
For more information on the requirements