Charity Return: When did you last do yours?
Last month we looked at charity accounting and reporting and saw that all charities (except unregistered charities with less than £5,000 annual income) must complete an annual return for the Charity Commission* This bulletin gives more detail on what the annual return involves.
Returns must be carried out online and completed within 10 months of the charity’s financial year end. It is a legal requirement which the Commission take very seriously. In the event that something goes wrong with a charity failure to complete the annual return will be taken as an indication that the charity has not been run properly. It is a good idea for churches to include in their AGM a declaration that the return has been completed.
So, what is required? The reporting requirements have varied over the years and the requirements for financial years ending in 2016 and 2017 are in three sections:
Part A: Charity governance.
This requests information on the following areas:
All Registered Charities:
Financial year periods and total income and expenditure.
Charity and trustee contact details.
Charities with income over £10,000, and all
Charitable Incorporated Organisations (CIOs):
Areas of operation outside England & Wales.
Land and buildings.
Policies, controls and regulation.
Part B: Financial Details This section contains detailed questions and is only required for organisations with an income over £500,000.
Part C: Accounts (if required) and declaration
For most of Rural Ministries’ partners the number of changes each year will be very few so completing the return will not take long.
The Commission is currently consulting on some changes it plans to introduce for reporting for financial years starting on or after the 1st January 2018. This includes moving to a new web-based system called, appropriately enough, the Update Charity Detail (‘UCD’) service. The new system will include a significant number of questions however many of these relate to such issues as the use of professional fundraisers, income/expenditure outside of England & Wales, and payments to trustees and employees, so they should not have a significant impact on most rural churches. The proposed changes also do away with some of the questions relating to volunteers and internal policies. Although this may be considered welcome it does not mean these things are not important. One question that will remain is whether, in the financial year, the charity reviewed its financial controls. This emphasises the importance the Commission places on this issue.
* England and Wales only. Separate reporting structures apply in Scotland and Northern Ireland.
This guidance only seeks to provide generalised advice on the subject covered to assist churches in their operation. It is not a substitute for seeking specific advice on particular issue.