Completing your charity’s annual return can be tricky, especially if you are unfamiliar with the process. This can often lead to errors being made that are difficult and time-consuming to rectify. Making mistakes or providing the wrong information can damage your charity’s reputation, so it is important to do all you can to ensure you provide accurate information in the correct way.

Mistakes are common. In fact, the Charity Commission noted in its last accounts monitoring review that 38% of small charities reported income and expenditure that did not agree with their accounts.

The purpose of the annual return is to ensure that the information held by the Charity Commission is up to date, in order for charities to be monitored and regulated effectively. The return also promotes transparency and accountability within the charitable sector by providing publicly available information relating to a charity’s operations and governance via the Charity Commission website.

We share our five top tips when considering submitting your charity’s annual return.

1. Work out what you need to report and when.

You must use the Gov.uk service to report your annual income and expenditure within 10 months of the end of the charity’s financial year.

This annual return is different from your charity’s annual accounts and the charity tax return you submit to HMRC.

If your charity has an income of less than £10,000, you only need to report a summary of your income and expenditure online with the Charity Commission.

If your charity’s income is between £10,000 and £25,000, then an annual return must be completed online, but no additional documents need to be submitted to the Charity Commission.

If the charity’s income is more than £25,000, then you must complete the annual return alongside uploading financial statements, including a trustees’ report and an independent examiner’s report.

If the income of the charity is more than £1 million, a full audit report with financial statements and trustees’ report is required, along with the annual return.

2. Keep your information up to date. 

Before you even file your return, you need to ensure all of the information logged by the Charity Commission is up to date. Trustees should always inform the Charity Commission of any changes promptly.

When starting to complete the return, there are six sections that you must go through to provide any missing information, update information or confirm there are no changes.

The Charity Commission then will email their contact at the charity, the person making the changes, and any trustees whose personal records have been changed, to confirm the amendments made.

Any appointed or resigning trustees should be reported, alongside any changes to governing documents, amendments to the charity’s financial period and changes to the charity’s name.

3. Understand who is responsible. 

The preparation and filing of the annual return can be completed by someone other than a trustee of your charity, as long as they are authorised to do so. Whoever is submitting the return, must confirm the information entered has been approved by the trustees.

The overall responsibility for the accuracy and timeliness of the return rests, however, with trustees.

4. Be accurate.

The Charity Commission reported in its last accounts monitoring review that only 71% of larger charities could provide an accurate analysis of their income and expenditure when requested.

Ensure that you are careful when entering all data, and if you are unsure of a definition, be sure to use the information button available on the pages.

Remember that you may have to provide additional details from the charity’s final approved accounts, depending on its income and expenditure.

5. Ensure your adviser is authorised to submit your accounts.

You can request a trusted adviser, including your charity’s Thomas Westcott accountant, to submit your charity’s annual return on your behalf. However, you must contact the Charity Commission first to grant your authority.

At least one day before it is ready to be submitted, contact the commission by phone, and pass on the contact details of your trusted advisor. They will update the account to allow your adviser to follow the next steps emailed to them to submit the accounts.

For more information and for assistance with your charity’s annual return, please contact me or your local Thomas Westcott office.

Tom Stuckey, Director