Charities must continue to file accounts with Charity Commission, say accountants

Suggestion by Lord Hodgson that the burden is disproportionate is rejected by professionals including Nick Brooks of Kingston Smith

Nick Brooks
Nick Brooks

Senior accountants have said they oppose a suggestion that charities should not be required to file accounts with the Charity Commission.

A call for evidence on reporting requirements for the review of the Charities Act 2006, being undertaken by the Conservative peer Lord Hodgson, said that 280 charities filed accounts every day, but most were not read by the commission.

"Is the burden on charities and on the commission proportionate, given that members of the public can ask any charity directly for its accounts and its annual report?" it asked.

Nick Brooks, head of not-for-profit at Kingston Smith, said that any suggestion that charities should not file accounts with the regulator was "absolutely bonkers".

"Filing your accounts is one of the checks and balances needed for good governance," he said. "If you removed this, it would be a disaster waiting to happen, because it would just mean that if you were irresponsible or disorganised at filing your accounts, no one would know."

Reza Motazedi, head of charities and not-for-profit at Deloitte, said he also thought it would be a poor move.

"The register is well used and the cost for charities to file is very low," he said. "Even if the commission doesn’t read their accounts, the knowledge that they are publicly available will increase people’s transparency."

Pesh Framjee, head of not-for-profit at Crowe Clark Whitehill, said: "It’s not the commission that benefits from accounts; it’s people who want to leave legacies, as well as accountants, lawyers and charity chief executives.

"Lord Hodgson suggested charities might post accounts on their own websites, but many people search the commission database and use it to compare accounts, which wouldn’t be easy if they were on charities’ own websites.

"Even those charities that do provide their accounts on their websites often make them quite difficult to find."

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