Government to reduce regulation burden on charities

The Government has announced new measures that it says will reduce the regulatory burden on thousands of charities.

The Office of the Third Sector has published proposals to raise the minimum income thresholds above which charities face more onerous financial reporting requirements.

However, Navca, the umbrella body for local infrastructure groups, reiterated its concern that the move could damage public trust by increasing the risk of fraud and financial mismanagement. It first raised the issue in March (Third Sector, 19 March).

Among the changes will be an increase in the threshold above which charities must prepare accruals accounts. The threshold will rise from £100,000 to £250,000, reducing the regulatory burden on about 11,700 charities.

There will also be an increase in the threshold above which accounts must be externally audited, from £10,000 to £25,000. This will cut red tape for about 37,000 charities.

Meanwhile, the threshold above which annual accounts - and the trustees annual report - must be submitted to the Charity Commission will be raised from £10,000 to £25,000. It is estimated that about 23,000 charities will benefit as a result of this change.

The new thresholds will be implemented for the 2009/10 financial year.

Phil Hope, Minister for the Third Sector, said: "I believe it is important that charities are free to focus as much time as possible on their core purpose, which is why I am delighted that these changes will see the administrative burdens of thousands of charities reduced."

Dame Suzi Leather, chair of the Charity Commission, said: "Achieving proportionate regulation is about finding the right balance: focusing on areas of greatest risk and ensuring that public accountability is greatest where the bulk of charitable resource lies.

"These changes represent another crucial step towards lightening the load for smaller charities whilst targeting the regulatory and accountability focus on larger charitable incomes - those organisations which enjoy most of the public's donations and most of the Exchequer's taxation relief."

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