A closer look at your charity's obligation to file an annual return.

A number of factors determine the reporting and accounting obligations a charity owes to the Charity Commission, including the charity's legal status, whether it is exempt from registration and the charity's gross annual income. This series of articles specifically looks at the reporting and accounting obligations of registered charities and does not consider the further obligations on charitable companies under the Companies Act 2006.

Unless it is an exempt or excepted charity, a charity must register with the Charity Commission if it has an annual income greater than £5,000. All registered charities must file an Annual Return, with the questions varying depending upon the income of the charity. All charities must also prepare an Annual Trustees' Report and Annual Accounts, with charitable incorporated organisations (CIOs) and those with a gross income of more than £25,000 being required to submit these to the Charity Commission. In all cases, the filings must usually be submitted within ten months of the registered charity's financial year end.

However, during the Covid-19 pandemic, the Charity Commission is seeking to take a more flexible approach to regulation. As such, registered charities can contact the Charity Commission to request a three-month filing extension for submission of the Annual Return - though success is not guaranteed1.

It is common for trustees to delegate the preparation and submission of the above documents. However, the Commission is generally subjecting charities to a greater degree of overall scrutiny and it is therefore important that charity trustees, given their ultimate responsibility, check and approve all documents before their final submission and to ensure all the information submitted is accurate and up to date.

The Annual Return

The Charity Commission published a new Annual Return in November 2018, with new questions on overseas funding, staff salaries and the safeguarding of children and vulnerable adults. These new questions reflect greater scrutiny of charities and the additional information provided (such as the number of staff members receiving pay of above £60,000) now feeds directly into the public Register of Charities. This in turn provides the public with more information on how charities operate and places the onus on trustees to ensure the information submitted to the Charity Commission as part of the Annual Return is accurate. In line with this, the full details of the charity and all trustees must be fully up to date before the Annual Return is submitted. Charities should therefore ensure the relevant charity administrator has the correct log in details to easily update its records (at the instruction of the trustees) as such changes happen.

CIOs and registered charities with a gross income exceeding £10,000 in any financial year must file an Annual Return with the Charity Commission within ten months of the end of that financial year. The level of income received by the charity in the relevant period determines the level of information required.

Broadly, the Annual Return provides the Charity Commission with a snapshot of the charity and is comprised of the following:

  • Charity information - confirmation of the details appearing on the public Register of Charities on the Charity Commission's website.
  • Financial information - details of total income and spending.
  • Serious incidents report - trustees must sign a declaration stating there were no serious incidents over the previous financial year that have not reported to the Commission.

Where a charity has a gross annual income of £10,00 or less, it completes a simplified annual update form. This does not have a statutory deadline, but the Commission recommends submitting it as soon as possible. Where a charity misses its filing deadline, it will be marked as 'overdue', which may have a detrimental effect on potential funders or donors and deter potential volunteers from getting involved.

Next we will be posting an article on The Annual Report: A closer look at your charity's obligation to prepare and file an annual report.


1 The Charity Commission received approximately 2,300 extension requests and approved 91% of these for the period 20 March - 30 September 2020.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.