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Charity Commission amends annual return requirements

Following an extensive consultation with the sector, the Charity Commission has made amendments to the content of the annual return for 2018 (AR18). It has dropped proposals for charities to report on their claims for rate relief on gift aid, but is going ahead with plans to ask charities to to report on executive pay and disclose their sources of overseas funding.

The Commission says the new annual return will make for an easier user experience for charities and estimates that on average, charities completing the annual return will answer 15 fewer questions than in the past.

The regulator has decided not to ask questions about whether charities are claiming rate relief for the premises they use and the amount of Gift Aid they have claimed and is looking at other ways of finding this information. Charities are already required to declare whether they are registered for Gift Aid, and the Commission will ask charities to provide their HMRC number.

New questions on executive pay will be included in the AR18. Charities will be asked for details of salary, bonuses, pensions and benefits in kind and will publish how many individuals receive total packages worth upwards of £60,000 in bands (in bands of £10,000 up to £150,000, then in bands of £50,000). The regulator will also ask for details about the highest paid employee, but that information will be held for regulatory purposes and will not be made public.

For the first time the AR18 will ask for information about income from outside the UK. For the first year only income from overseas governments, quasi-governmental bodies, charities or NGOs will need to be declared, but in future years all overseas income from other institutions or donors will also need to be declared.

To reduce the administrative burden, charities with an income of £25,000 or less will only be asked to report individual payments which make up 80% or more of their gross income. Those with an annual income over £25,000 will only be asked to give the total value of all of the individual payments which are above £25,000.

The annual return must be completed by charities with an annual income of £10,000. It applies to financial years ending after 1 January 2018. Charities have ten months from the end of their financial year to complete it. The Commission is currently developing a digital service to help complete the 2018 annual return.

If you have any questions about the new annual return requirements and how to comply, please contact our Charities team.

Charity Newsletter

Summer 2018

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