Financial thresholds in Charities Acts updated from 1 April 2009
April 2009
The Government has made a number of changes to the financial thresholds in the Charities Acts following a public consultation.
These changes took effect from 1 April 2009 and are:
- the annual income threshold for requiring accounts to be externally examined is raised from £10,000 to £25,000;
- the annual income threshold for the preparation by non-company charities of accruals accounts is raised from £100,000 to £250,000;
- the assets element of the audit threshold is raised from £2.8 million to £3.26 million and the lower income trigger for this is raised from £100,000 to £250,000; and
- the annual income threshold for registered charities to submit their annual accounts and Trustees' Annual Reports to the Commission is raised from £10,000 to £25,000.
The revised thresholds will apply to financial years ending on or after 1 April 2009. Nick Sladden of Bakery Tilly made the following observations to Caritas:
- These measures are a real benefit to charities with an income of between £10,000 and £25,000 per annum. The burden of having to find an individual with the necessary expertise to take on the responsibility of being an independent examiner has been removed from charities in this category. This will be a welcome change particularly for smaller community based charities.
- A large number of unincorporated charities with income of less than £250,000 per annum will no longer have to meet the requirements of the Charities SORP 2005 in full. This removes a substantial financial reporting burden from those smaller charities.
- The increase in the annual income threshold for charities to submit their annual accounts and Trustees' Annual Reports to the Commission is a step backwards in transparency and accountability for the sector. Charities will still need to prepare these documents and for some time they have been able to submit them electronically to the Commission. This process is not costly and enables the general public to use the Commission's website to view the documents. Smaller charities may therefore wish to consider including their annual accounts and Trustees' Annual Reports on their own websites in order for their annual reporting to be more accessible to the general public.
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