The need for transparency in terms of a charity’s activities and finances has always been crucial to ensure public accountability. This principle is embedded within the law, which ensures the availability of information to the public with the following requirements:
- Any charity with an annual income over £10,000 is required to submit an annual return each year.
- Any charity that is registered with the Charity Commission but has an income of less than £10,000, is required to inform the Commission of its income and expenditure and about any changes that may take place (eg, if there is a change in Trustees).
- For charities with an income greater than £25,000, they must provide a copy of their accounts at the same time as submitting their annual return.
- The annual return and accounts (if applicable) must be submitted within ten months of the end of the charity’s financial year.
So what are the consequences of not complying with the above? At the moment, any breach would be highlighted on the charity’s records available on the Charity Commission’s website, in the hope that this will provide sufficient embarrassment to incentivise prompt filing. But is this enough of a deterrent?
The Charity Commission’s actions over the last few months suggest they think more is required. Not only have they recently announced they are considering whether it would be appropriate to issue fines for late accounts, they have also stated that they are considering actively advising the public not to give to charities that fail to file on time.
The recent decision to open a statutory enquiry into a charity that failed to file accounts for the last five years has also provided a warning against any ongoing breach.
The Charity Commission are clearly seeking to emphasise the importance of complying with reporting requirements. The announcements that we have seen over the last few months suggest greater penalties may follow for those that do not.