This page contains information that has appeared on Sandy Adirondack's legal update website for voluntary organisations at www.sandy-a.co.uk/legal.htm. For current updates, including potential changes that are in the pipeline, see the legal update website.

These websites for each chapter update the 3rd edition of The Russell-Cooke Voluntary Sector Legal Handbook by James Sinclair Taylor and the Charity Team at Russell-Cooke Solicitors, edited by Sandy Adirondack (Directory of Social Change, 2009). The websites are not intended as a comprehensive update and should not be treated as such.

To order a copy of The Russell-Cooke Voluntary Sector Legal Handbook, print out the order form at www.sandy-a.co.uk/bookserv.htm or send an email order by clicking . It costs £60 for voluntary organisations or £90 for others, plus 10% p&p.

Chapter 54
ANNUAL ACCOUNTS, REPORTS AND RETURNS

ACCOUNTING THRESHOLD CHANGES FOR UNINCORPORATED AND OTHER NON-COMPANY CHARITIES

Updated 6/4/10. This information is included in s.54.2.2 in The Russell-Cooke Voluntary Sector Legal Handbook (VSLH3).
For financial years ending on or after 1 April 2009, unincorporated and other non-company charities with annual income no more than £25,000 no longer need to send their annual accounts and report to the Charity Commission, and should not do so unless the Commission requests it.

The threshold above which a non-company charity must prepare accruals accounts — rather than having the option to prepare a simpler receipts and payments account instead — is increased from £100,000 to £250,000.

The Charity Commission has two accruals accounts packs, with templates in Microsoft Excel and in PDF, for non-company charities which prepare accruals accounts but are not required to have a full audit (see below). The new CC39, published in March 2010, is for charities in this category preparing accounts using natural categories (such as grant income, donations, salary costs, premises costs etc), and CC17 is for those which analyse their expenditure by charitable activity rather than by natural categories. Both can be accessed at www.charity-commission.gov.uk/publications/cc17.aspx.

An updated pack with templates for receipts and payments accounts, CC16, is at www.charity-commission.gov.uk/publications/cc16.aspx

The increased thresholds are in the Charities Acts 1992 and 1993 (Substitution of Sums) Order 2009 at www.opsi.gov.uk/si/si2009/uksi_20090508_en_1. Full information about all the financial changes from 1 April 2009 is in CC15b Charity reporting and accounting: The essentials (April 2009) at www.charitycommission.gov.uk/Publications/cc15b.aspx.

AUDIT OR INDEPENDENT EXAMINATION OF UNINCORPORATED CHARITIES

Updated 26/4/09. This information is included in s.54.2.7 in The Russell-Cooke Voluntary Sector Legal Handbook (VSLH3).
For financial years starting on or after 27 February 2007, level of expenditure is no longer a factor in determining whether an unincorporated or other non-company charity must have an independent examination or full audit, nor is level of income or expenditure in the preceding two years.

For financial years ending on or after 1 April 2009, a non-company charity with income over £25,000 (increased from £10,000) and up to the threshold for full audit must have either an independent examination or a full audit. The annual income threshold for full audit is £500,000 (increased from £250,000), or annual income more than £250,000 (increased from £100,000) with total assets valued at more than £3.26 million (increased from £2.8 million).

For financial years starting on or after 27 February 2007, independent examiners for charities with income between £250,000 and £500,000 must have a professional qualification or be a fellow of the Association of Charity Independent Examiners. Above this level they must have a professional qualification.

These provisions are in s.28 of the Charities Act 2006, which amends s.43 of the Charities Act 1993, and the increased thresholds are in the Charities Acts 1992 and 1993 (Substitution of Sums) Order 2009 at www.opsi.gov.uk/si/si2009/uksi_20090508_en_1. For links to the Acts and guidance, see The Charities Act 2006.

COMPANY ACCOUNTS AND REPORTS

Updated 26/4/09. This information is included in s.54.3 in The Russell-Cooke Voluntary Sector Legal Handbook (VSLH3).
For financial years ending on or after 1 April 2009, charitable companies with annual income no more than £25,000 no longer need to send their annual accounts and report to the Charity Commission, and should not do so unless the Commission requests it. They do, however, still need to send their accounts and report to Companies House.

The increased threshold is in the Charities Acts 1992 and 1993 (Substitution of Sums) Order 2009 at www.opsi.gov.uk/si/si2009/uksi_20090508_en_1. Full information about all the financial changes from 1 April 2009 is in CC15b Charity reporting and accounting: The essentials (April 2009) at www.charitycommission.gov.uk/publications/cc15b.aspx.

For financial years starting on or after 6 April 2008:

• There is a new duty on company directors not to approve the company's annual accounts unless they are satisfied the accounts give a true and fair view of the company's (or the group's, in the case of group accounts) assets, liabilities, financial position and profit and loss (Companies Act 2006 s.393).
• Private companies no longer have to lay their annual accounts and reports at an AGM and send them to members 21 days before the AGM. Instead, the accounts and report or summary financial statement must be sent to all members for whom the company has a current address, and to certain other people, no later than the date the company has to file the accounts at Companies House or, if earlier, the date when the accounts are actually delivered to Companies House (ss.423-429). For many voluntary sector companies it will still be good practice to send out the accounts before an AGM or other general meeting, and to present the accounts at the meeting.
• The accounts have to be filed at Companies House within nine months (reduced from 10 months) after the end of the relevant accounting reference period. If the relevant accounting reference period is the company's first and is a period of more than 12 months, the filing deadline is nine months from the first anniversary of the incorporation of the company, or three months after the end of the accounting reference period, whichever is later (s.442).

SANDY ADIRONDACK
Governance and legal training and consultancy
for the voluntary sector
39 Gabriel House, 10 Odessa Street, London SE16 7HQ
Tel 020 7232 0726; fax 020 7237 8117
Email:
Web: www.sandy-a.co.uk