Commission raises accounts threshold

Charities with an annual income below £25,000 will no longer have to submit their annual accounts to the Charity Commission under plans approved by the regulator. The threshold is currently £10,000.

However, the commission intends to introduce random checks for those below the £25,000 threshold.

The commission’s board approved the change after a lively discussion at its board meeting on Wednesday. A number of commission members shared concerns expressed by some consultation respondents earlier this year that raising the threshold risked promoting slack governance and undermining public confidence in small charities.

Theo Sowa, a commission board member, said: “There is a discipline for small charities in thinking about the work they do, and it makes a difference to public perceptions of transparency. If no one is asking for something, it is easy not to do it.”

However, the board eventually agreed to lift the threshold after Andrew Hind, the its chief executive, pointed out that since the regulator did not post accounts of charities with incomes below £25,000 on its website, there will be no change to the information immediately available to the public.

He added there had been no increase in the £10,000 threshold since 1993, but inflation put that figure at close to £20,000 today.

The idea of conducting random checks on the accounts of a small number of charities below the new threshold was put forward by John Wood, another commission board member. He likened the idea to self-certified tax returns, some of which are audited by HM Revenue & Customs. Commission staff will look into the feasibility of doing random checks, but the decision to raise the threshold will have to be approved by the Office of the Third Sector.

A proposal to raise the threshold for preparing an annual report to £25,000 was rejected. All other changes to thresholds put out for consultation were approved, including raising the threshold for preparing accruals accounts for unincorporated charities from £100,000 to £250,000.

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