The type of accounts and report which a charity has to prepare depends on:
its legal structure
its income
the value of its assets.
Every charity, even if it is not required to register with the Charity Commission, must keep accounting records (these include cash books, receipts, records of grants, etc.) and prepare annual accounts. Have a look at our pages on Managing Money for help with this. All charities must also prepare aTrustees Annual Report, detailing your work for the year.
Irrespective of your legal obligations, your charity’s constitution or other governing document may also require you to send the annual accounts and a Trustees’ Annual Report to members and approve them at an Annual General Meeting (AGM). It is certainly good practice to do so even if you are not required to by law.
Annual income of £5,000 to £25,000
All charities with an annual income above £5,000 are required by law to register with the Charity Commission. Every registered charity must produce a Trustees’ Annual Report and make it available on request.
Those with an income below £10,000 are required to submit an Annual Update to the Charity Commission, which includes changes to the charity’s details, changes to trustee details, plus income and expenditure for the year.
Those with annual income above £10,000 (and all CIOs, regardless of income) must submit an Annual Return to the Charity Commission within 10 months of the end of their financial year, which includes information from the Annual Accounts and Trustees’ Annual Report.
Annual income between £25,000 and £250,000
Charities with a gross annual income between £25,000 and £250,000 must have their annual accounts independently examined or audited. These form part of the Annual Return, which must be submitted to the Charity Commission within 10 months of the end of the financial year with the simplified Trustees’ Annual Report.
Annual income between £250,000 and £1m
Charities with an annual income between £250,000 and £1m (with assets worth less than £3.26m) have to keep accruals accounts, which must be either audited or independently examined by an individual who is a member of a body approved by the Charity Comission. These form part of the Annual Return, which must be submitted to the Charity Commission within 10 months of the end of the financial year with a simplified Trustees’ Annual Report.
Annual income over £1m
Charities with an annual income over £1m (or an annual income over £250,000 and assets worth more than £3.26m) must keep accruals accounts, which must be audited. These form part of the Annual Return, which must be submitted to the Charity Commission within 10 months of the end of the financial year with a full Trustees’ Annual Report.
What are Charitable Companies?
A charitable company has to comply with both company law and charity law. This means they have to submit information to the Charity Commission and Companies House. All charitable companies have to keep accruals accounts, irrespective of income or assets.
What are Charitable Incorporated Organisations? (CIOs)
All CIOs have to register with the Charity Commission, irrespective of income, and they all have to submit an Annual Return.