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CHARITIES URGED NOT TO LEAVE NEW ANNUAL RETURN COMPLETION UNTIL THE LAST MINUTE

10th Nov 2023
Stef Smith

Charities are being urged not to delay completing their statutory Annual Returns, as a new format means that the task will require more time and input than in previous years.

The new Annual Return was made available earlier this month, and must be submitted within ten months of a charity’s financial year-end – which for many organisations means a 31st January deadline.

Charities leaving it until the last minute could risk missing that deadline, according to Stef Smith, a member of Lovewell Blake’s specialist charity team – and that could result in them being excluded from future Trust and Foundation funding on the grounds of bad governance.

Annual Returns must be submitted to the Charity Commission by all charities with an annual income of more than £10,000, as well as all those registered as Charitable Incorporated Organisations (CIOs).

“For smaller charities in particular, completing the Annual Return is likely to be a much bigger task this year,” said Stef Smith.  “Charities will need to set up a new My Charity Commission Account to complete the task, which has to be undertaken by a ‘lead person’. 

“We understand that The Charity Commission is currently experiencing a high volume of requests, and so may take a little time to respond.

“Our advice is to tackle it as soon as possible, and not leave it until the last minute, because that risks the Return being submitted late – and that is something which both the Charity Commission and potential funders tend to take a very dim view of.”

One of the biggest changes in the new-format Annual Return is that smaller charities now have to provide a detailed breakdown of where their income originates from, something which larger charities already had to do.  As well as reporting gross income, every charity must now detail the sources of that income: government contracts and grants, donations and legacies, charitable activities, other trading activities and investments.

The new Return also asks about the sources of large donations (both corporate and individual), and whether any donations have come from a ‘related party’.  Information about income which comes from outside the UK is also required, including (for example) interest from non-UK bonds or donations from a non-UK private company. 

The new Annual Return asks about property held by the charity, and in particular any property held on the charity’s behalf by trustees.  There are also questions about the structure of the organisation, numbers of employees and the nature of their contracts, and numbers of volunteers.  There are also wide-ranging questions about safeguarding and risk.

Guidance on completing the new online Annual Return can be found at www.gov.uk/guidance/prepare-a-charity-annual-return.