Changes to the Charities Annual Return

06/02/2018

After extensive consultation, the Charity Commission has made changes to the annual return for financial years ending on or after 1 January 2018.

The rationale behind the changes was to simplify the return for most charities, but to request more information on larger and more complex operations. The Commission estimates that on average, charities will have to answer 15 fewer questions compared with previous returns.

The return is used as a tool to promote charity accountability to the public, donors and beneficiaries. It also ensures that the Commission receives all the necessary information for it to be an effective, risk-led regulator.

The new return asks for additional information from all charities on executive pay, as this is an area where the public expect transparency.  Numbers of staff receiving total remuneration (including all salary, bonuses, pension contributions and benefits in kind) of £60,000 and over in bands of £10,000 needs to be given by all charities (bands of £50,000 for packages over £150,000).

This information will be made public by the Charity Commission.  Although this is a new requirement, annual accounts already include the banding information. In addition, charities also need to disclose the value of the total employee benefits paid to its highest paid employee, but this information will not be made public by the Commission.

Income from overseas governments, quasi-governmental bodies, charities or NGOs will need to be declared for all charities. In future years all overseas income from other institutions or donors will also need to be declared.  This additional information is required as part of the government’s anti-terrorism and extremism measures.  This is viewed as an increased administrative burden by many in the sector.

For advice on the changes to charity returns contact Elizabeth Irvine