Amended Annual Return Requirements for Charities

The Charity Commission has amended the Annual Return requirements for this year. They’ve dropped proposals for charities to report on their claims for rate relief or gift aid, but have kept a new requirement to report on executive pay.

We know that many of you are trustees of local and national charities, so you’ll be interested to know about these amendments, which became effective from 1 January 2018.

The annual return must be completed by charities with an annual income of £10,000. The 2018 return applies to financial years which end after 1 January 2018. Charities have ten months from the end of their financial year to complete it.

Online Reporting of Changes to Trustees

The annual return has been streamlined to enable the Charity Commission to collect information which is relevant to your charity. You should see 15 fewer questions than previously.

However, the most important change that will affect all charities is the requirement to update changes to registered details online as they occur, to keep the register accurate. This includes changes to Trustees.

In 2017 the Commission went out to consultation about new questions which they proposed to include in the annual return. Following feedback they dropped questions about gift aid and the use of rate relief. It’s fair to say that both items will be addressed in the future.

New Annual Return Requirements

A new addition to the return is the request for information about income from outside the UK. As the information will need to be collected and sorted, this reporting is voluntary for 2018 but will mandatory from 2019.

There is also a new requirement for reporting on methods of transferring money overseas. Again it’s voluntary for 2018 but compulsory for 2019 onwards.

To reduce administration on charities with an income of £25,000 or less, they’ll only be asked to report individual payments which make up 80% or more of their gross income. Those with an annual income over £25,000 will only be asked to list individual receipts above £25,000.

Report on Staff Pay

Following public concerns, the 2018 returns will ask for information about pay to members of staff.

The question includes salary, bonuses, pension contributions, private health care and other benefits in kind. Individuals receiving packages of £60,000 a year upwards will be made public, in a banded style (bands of £10,000 up to £150,000, then in bands of £50,000).

For regulatory purposes, charities will also be asked for information about the highest paid employee.

Implementation of Amended Annual Return Requirements

The Charity Commission is developing the digital service to underpin the 2018 annual return and hopes to make it available within the next four months.

Annual Return Service for Charities

Charities of all kinds add so much to our society – we’d be lost without them. If you are involved with a charity which requires assistance with accounts, business planning or the annual return, please get in touch with us at Jones Harris for a no-obligation chat.

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