Charity reporting and accounting

The following Private Client practice note provides comprehensive and up to date legal information covering:

  • Charity reporting and accounting
  • Registered non-company charities where gross income does not exceed £25,000 in the relevant financial year
  • Registered non-company charities with a gross income of over £25,000 but not exceeding £250,000 in the relevant financial year
  • Registered non-company charities with a gross income of over £250,000 but not exceeding £500,000 in the relevant financial year, and total assets not exceeding £3.26m
  • Registered non-company charities with a gross income exceeding £500,000 in the relevant financial year, or whose gross assets exceed £3.26m and gross income exceeds £250,000
  • Registered non-company charities which have either charitable or non-charitable subsidiaries must prepare group accounts where the income of the group, after eliminating intra group transactions and consolidation adjustments, exceeds £500,000
  • Company charities
  • Charities excepted from registration
  • Charities exempt from registration
  • Accounts

Charity reporting and accounting

FORTHCOMING CHANGE: On 22 March 2021, the government published its response  to the Law Commission’s report of 14 September 2017, ‘Technical Issues in Charity Law’. The Report stemmed in part from Lord Hodgson’s review in July 2012 pursuant to section 73 of the Charities Act 2006 (ChaA 2006), ‘Trusted and Independent: Giving charity back to charities’. The Report made 43 recommendations, in 12 areas. The Response wholly or partially accepted 38 of the recommendations. For a commentary on the Response please see News Analysis: Government response to Law Commission report ‘Technical Issues in Charity Law’. It is worth bearing the proposals – and the Response – in mind when considering and advising on charity law in general. 

Of particular relevance to this Practice Note, the government has accepted all proposals in relation to financial thresholds. Charities’ accounting and reporting requirements vary according to financial thresholds such as income. The Law Commission recommended that these thresholds are reviewed regularly with a view to increasing them, by secondary legislation, in line with inflation. The government agreed that such a review should take place at least every 10 years, and subject to resources, that it would aim to undertake a review of the financial thresholds in 2022. The government agreed with the Law Commission’s conclusion that an automatic inflation adjustment would not be the right solution as it

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