Government urged not to drop requirement for companies to report charitable donations

Draft legislation aims to simplify companies' annual reports, but Jay Kennedy of the Directory of Social Change says the move would make it harder to get an accurate picture

Jay Kennedy
Jay Kennedy

The Directory of Social Change has urged the government to rethink plans to remove the requirement for companies to list charitable donations in their annual reports.

The Department for Business, Innovation and Skills has outlined reforms aimed at simplifying companies’ annual reports in draft secondary legislation due to come into force from 1 October.

Companies will have to include additional information on human rights issues, gender balance and greenhouse gas emissions. But the amendments would omit the current requirement for companies to include charitable donations of more than £2,000.

Lord Younger of Leckie, parliamentary under-secretary of state at BIS, told a grand committee at the House of Lords on Wednesday: "The government will also no longer require companies to disclose their charitable donations. While we encourage companies to engage in philanthropy, we have no evidence that this disclosure affects charitable giving while the disclosure itself has become burdensome to business."

The Lords agreed the motion to approve the changes.

Jay Kennedy, director of policy and research at the DSC, said the government was acting in the interests of big business and not the public interest.

"We need more, not less, information in the public domain about which charitable causes companies are supporting and how," he said. "The information we have at present is paltry and generally appallingly presented – we know because we have been researching it for 25 years.

"The widespread lack of transparency and rigour already makes it difficult to get an accurate and robust picture of what companies do to meet their social responsibilities."

The draft legislation detailing the changes, the Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013, was laid before parliament on 12 June and will affect reports due on or after 1 October.

A BIS spokeswoman said the department ran a consultation in 2011 about removing certain reporting requirements in order to simplify reports for those who write them and who want to read them. 

"The consultation found broad support for the removal of these requirements, including that for reporting charitable donations," she said. "We received no evidence that they affected levels of charitable donations."

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