We prepare statutory accounts for all types of charitable organisations that do not require an audit and have a gross income of £250,000 or less. The exact statutory requirements depend on the legal form of your charity and the size of the organisation.

  • whether or not your charity is also a company (registered with Companies House and teh Charity Commission or a charitable organisation solely registered wit the Charity Commission.
  • your charity’s income for the current financial year
  • the value of your charity’s assets
  • whether or not your charity is ofa size that is required to be registered as a charity with the commission

You should then ensure that the charity’s trustees understand:

  • what type of accounts must be prpeared
  • what information is needed in teh trustees’ annual report (annual return)
  • whether the accounts need an independent audit
  • what information must be sent to teh Charity Commission.

If you do have to send your charity’s annual report and accounts to the commission, you must do so within 10 months of the end of your charity’s financial year. In the interests of transparency the commission encourages you to do so much sooner than this in order to give an up-to-date and current picture of your charity to those interested in your charity’s work.

Accounts and Annual reports

All charities must prepare accounts and make them available on request. All registered vharities must prepare a trustees’ annual report and make it available on request.

For non company charities the following options are available dependent on size.

Income less than £10,000

Receipts and payments accounts or accruals accounts.
Are asked to complete an annual return for certain items.
No requirement to have the accounts independently examined.

Income between £10,000 and £25,000

Receipts and payments accounts or accruals accounts.
Must file an Annual return with the Charity Commission.
No requirement to have the accounts independently examined.

Income between £25,000 and £250,000

Receipts and payments accounts or accruals accounts.
Must file an Annual return and accounts with the Charity Commission.
Accounts must be independently examined.

Income between £250,000 and £1,000,000

Accruals accounts that comply with the applicable Statement of Recommended Practice (SORP). The SORP to follow will depend upon the charity’s financial year. Accruals accounts contain a balance sheet, a statement of financial activities and explanatory notes. These accounts are required in accountancy terms to show a ‘true and fair view’.
Must file an Annual return and accounts with the Charity Commission.
Accounts must be independently examined.
An audit will be required if total assets (before liabilities) exceed £3.26 million.

Income exceeds £1,000,000

Accruals accounts.
An audit is required.

Receipts and payments accounts

This is the simpler of the 2 methods of accounts preparation and may only be used where a non-company charity has a gross income of £250,000 or less during the financial year. Receipts and payments accounts contain a statement summarising all money received and paid out by the charity in the financial year, and a statement giving details of its assets and liabilities at the end of the year. Charitable companies are not allowed by company law to adopt this method.

Accruals

Non-company charities with gross income of over £250,000 during the financial year, and all charitable companies must prepare accruals accounts that comply with the applicable Statement of Recommended Practice (SORP). The SORP to follow will depend upon the charity’s financial year. Accruals accounts contain a balance sheet, a statement of financial activities and explanatory notes. These accounts are required in accountancy terms to show a ‘true and fair view’.