The Regulator for Charities in England and Wales
All charities must prepare annual accounts and all registered charities must, and all charities should, prepare a trustees’ annual report. This page summarises the guidance and help available on our website to assist those preparing of charity accounts:
For financial years ending on or after 1st April 2009, please refer to Charity Reporting and Accounting: The essentials April 2009 (CC15b).
For earlier financial years:
For financial years commencing on or after 1st April 2008 and ending on or before 31st March 2009 inclusive, please refer to Charity Reporting and Accounting: The essentials April 2008 (CC15a).
Our Guidance Charity Reporting and Accounting: The essentials (CC15) sets out the accounting requirements for different sizes and types of charities when preparing accounts and reports for financial years commencing between 27th February 2007 and 31 March 2008 that end before 31 March 2009.
If your charity has a gross income of £250,000 or less and is not a company then you may be able to prepare receipts and payments accounts that provide a simple and flexible basis for accounts preparation.
Small non-company charities with financial years ending on or after 1 April 2009 that have an income of £250,000 or less can choose to prepare receipts and payments accounts. For financial years ending before 1 April 2009 there is a lower gross income threshold of £100,000 above which accrual accounts must be prepared.
We have produced a template for the layout and content of the trustees’ annual report and accounts for charities that can be used by charities that are eligible and choose to prepare their accounts on a receipts and payments basis.
Our Examples Trustees Annual Reports and Accounts also contain an example (Westbeach Youth Club) of accounts prepared using the receipts and payments pack.
Small charities choosing to produce accruals accounts are encouraged to use the Accruals Accounts Pack (CC17).
From the 1 April 2008 all charities (company and non-company) may opt for an independent examination instead of an audit. This follows changes in charity and company law which extends the option of the independent examination to company charities for the first time. The new guidance on independent examination is now in two publications:
CC31- Independent Examination of Charity Accounts - Trustees' Guide sets out what an independent examination is and advises trustees on how to go about selecting their examiner.
CC32- Independent Examination of Charity Accounts - Examiners' Guide sets out what an independent examination is, who can undertake one, the Directions the examiner must follow and their whistle blowing responsibilities. It includes sample independent examination reports and advice for examining charities with dual registered with the Office of the Scottish Charity Regulator.
Prior to financial years beginning 1 April 2008 only non-company charities below the audit threshold could normally have their accounts examined by an independent examiner rather than an auditor. The Charity Commission has produced guidance for independent examiners and pro forma independent examiners reports.
CC63a - Independent Examination of Charity Accounts applies to non-company charities for accounting periods beginning before 1 April 2008 and provides a commentary on the Charity Commission’s directions to independent examiners and gives details of how to calculate a charity’s gross income and total expenditure.
‘Accounts packs’ are available for use by small non-company charities that are below the audit threshold.
For financial years ending on or after 1 April 2009, an audit will be only be needed if gross income is more than £500,000 or where gross income exceeds £250,000 and the aggregate value of assets is more than £3.26m. For financial years ending before 1 April 2009, a lower aggregate asset threshold of £2.8m is applied when income exceeds £100,000.
The pack which provides a template for the layout and content of the trustees’ annual report and accounts can be used where these audit thresholds are not exceeded.
Charities not using the ‘accruals accounts pack’ must be familiar with the SORP 2005 when preparing their accruals accounts.
Larger non-company and company charities prepare accounts on an accruals basis and therefore are required to use the SORP.
The Charities’ Statement of Recommended Practice published in March 2005 (SORP 2005) provides accounting recommendations and provides the format and content of charity reports and accounts. It applies to charities that prepare accruals accounts to give “a true and fair view.” SORP 2005 was reprinted as a second edition in May 2008 with its legal references updated. Its recommendations remain unchanged and therefore accounting policy notes should still refer to the ‘methods and principles’ of SORP 2005.
Charities with an accounting period beginning on or after 1 April 2005 should refer to SORP 2005.
A number of examples of charity reports and accounts prepared under SORP 2005 are available to help those designing the format and layout of their accounts.
The framework for accounting and reporting has evolved significantly over the years. While the Charities Act 2006 simplifies the rules, we realise that from time to time, charities, their advisors and others will want to refer back to the more complex requirements for accounting and reporting which applied to earlier financial years.
View the deliberations of the new SORP Committee , who they are and what they discussed at the latest meeting and for details of the SORP Committee's research programme on charity reporting and accounting.
ICAEW / CAF’s ‘Charities' Online Accounts Awards’ recognise excellence in financial reporting and encourage best practice in online financial accounts with examples of all sizes of charity. Take a look at these award winners for some practical assistance in preparing high quality reports and accounts.
For financial years beginning before 1 April 2008, small charitable companies below the audit threshold may opt for an audit exemption report by a Reporting Accountant instead of an audit. The standards for such work are published by the Auditing Practices Board. For financial years commencing on or after 1 April 2008, company charities not required to be audited under Companies Act provisions fall within the audit and independent examination regime of the Charities Act 1993.
Provides links to the websites of other organisations that provide further information or guidance on accounting, tax and other financial issues.
The Charity Commission can provide further advice on general charity accounting matters.