How charities can prepare for the 2018 annual return - Thorne Widgery

The Charity Commission has released detailed guidance on how to effectively prepare for this year’s annual return service.

It follows a consultation last year, which saw a number of questions removed to simplify the process for smaller charities.

But organisations must still be prepared for new reporting requirements, such as how and salaries and benefits are paid within the sector.

What’s new in the 2018 annual return:

Income from outside the UK

The annual return will now ask for more detailed evidence on revenue generated overseas. For example, it will ask you to break down sources of income from each country a charity receives funds from. These can include overseas governments, charities, institutions, individual donors and ‘unknown’ sources.

It suggests that some charities will be required to change their financial systems to better account for income from outside the UK.

These questions will be voluntary in 2018, but mandatory from 2019 onwards.

Overseas expenditure

The new annual return will look to establish how charities spend, transfer and monitor spending outside the UK. It will do this to assess the risks involved, for example, if money is transferred to an unregulated banking system.

These questions will be voluntary in 2018, but mandatory from 2019 onwards.

Salary and benefits in charities

Following the Government’s compulsory gender pay gap reporting rules introduced in 2016, charities will now be required to provide more information about salaries to “increase accountability”.

The new annual return will ask for a breakdown of salaries across income bands and the amount of total employee benefits for the highest paid member of staff.

It says it will not publish details of benefits given on a public register.

For advice on how to prepare for the 2018 annual return, please get in touch.