All charities whose annual income exceeds £10,000 must complete the annual return. The Annual Return 2018 applies to all charities with financial years ending from 1 January 2018. Charities have ten months from the end of the financial year to complete the return.
From 1 January 2018 the requirement to update the registered details of a charity will be removed from the annual return but will be available via a new online update service. This new service will require charities to maintain the latest registered particulars as and when they occur hence all information online will be up to date.
The annual return has been adapted to reflect only financial and regulatory information relevant to each charity, reducing the number of additional commentaries currently provided by charities.
New questions appearing on the annual return include information of income receivable from outside of the UK. Charities may need to adapt their systems to gather and collate certain criteria of information such as donations from individual donors outside the UK or private institutions and hence for the 2018 return this information will be voluntary with a mandatory requirements being implemented for 2019. For the smaller charities i.e. income less than £25,000 reporting for non UK income only applies if these incomes are more than 80% of the charity’s gross income, for all other charities commentary is required if the total value of all of the individual receipts are more than £25,000.
For charities which transfer monies overseas, there are questions over the methods used, again voluntary in 2018 but mandatory from 2019 onwards.
The new Statement of Recommended Practice (SORP) introduced the requirement to disclose senior management remuneration and the return has asked charities to provide information about the total remuneration received by their staff members, including salary, bonuses, pension contributions, private health care and other benefits in kind.
The Commission will then make public how many individuals receive total packages worth upwards of £60,000 in bands of £10,000 up to £150,000 and then in bands of £50,000. For their own regulatory purposes they also wish to know the value of the highest paid employee, this will not be on public record.
These changes are part of the Charity Commissions drive to reduce the administrative burden on charities but to also ensure transparency and openness and to raise public confidence in the sector. It is hoping to develop the digital service and make the return available within the next four months.
For more information about changes to the annual return, please get in touchContact us
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