Charities face new accounts rules

The rules include the following:

  • Charities with an annual income of £25,000 or under no longer have to send annual accounts and report to the Charity Commission unless the Commission asks for them. (If the charity is a limited company, it still has to send them to Companies House.)
  • The income limit at which non-limited company charities have to prepare 'accrual accounts' increases from £100,000 to £250,000. Below that, they can continue to prepare 'receipts and payments' accounts.
  • The income limit over which non-limited company charities require an independent examination or full audit increases from £10,000 to £25,000.
  • The income limit over which limited company charities require a full audit increases from £250,000 to £500,000 (or from £100,000 to £250,000 if the charity has assets of more than £3.26 million).
  • Charitable companies defined as 'small' under the Companies Act 2006 require an independent examination or audit under charity law rather than company law. The limits are the same as for charities that are not limited companies. For medium-sized or large companies, the 2006 Act provisions continue to apply.

If the financial year starts on or after 6 April 2008 (which includes financial years ending on 31 March 2010), limited company accounts must be filed at Companies House within nine months of the year end (rather than the previous ten). The time limit for charitable companies to file them with the Charity Commission remains at ten months.

Ensure that you are preparing accounts in the right format and diarise the right filing dates.

  • Prompt, efficient and clear communication, helped provide a clear understanding of the issues and situation