A closer look at your charity's obligation to prepare and file an annual report.
The charity trustees of all registered charities must prepare an Annual Report. Where the charity's gross income in any financial year exceeds £25,000, the Annual Report, along with the Annual Accounts, should be submitted to the Commission within ten months from the end of that financial year. A charity with a gross income of £25,000 or less should still prepare an Annual Report, but is only required to provide this information if the Charity Commission or a member of the public requests it. All charitable incorporated organisations (CIOs), irrespective of gross annual income, must complete and file and Annual Report.
The Annual Report is designed to provide people with a deeper understanding of what the charity does and demonstrates the benefit to the public of the charity's work, whilst also showing funders what was achieved with their money. It should include the following:
- details of the charity, including name and address, registered charity number, trustees and advisers;
- how the charity is structured and the recruitment process for trustees;
- governance and management details;
- a summary of the charity's objects and how its activities undertaken to further those objects;
- the charity's main achievements during the relevant financial year;
- a financial review (in particular covering the charity's reserves policy);
- a public benefit statement confirming that the trustees have complied with their duty to have due regard to the guidance on public benefit published by the Commission in exercising their powers or duties; and
- where a charity or CIO is subject to a statutory audit, it must produce an annual report in accordance with the relevant SORP.
It is important to note that where a charity is a company, the Trustees' Annual Report overlaps with the reporting requirements under the Companies Act 2006. For ease, the same document filed with the Charity Commission can be filed with Companies House, providing that it covers both sets of reporting requirement.
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.