Finance news: Spat over red tape proposal

The Charity Commission has rejected calls by a government task force to abolish the Summary Information Return (SIR) less than a year after it was introduced.

The Better Regulation Task Force recommended that the form, which charities with an annual income of more than £1m have to complete, be integrated with annual returns and accounts to save the voluntary sector form unnecessary paperwork.

The Charity Commission, which was asked by the Home Office to introduce the form, immediately condemned the proposal.

"We disagree with the recommendation that we should review the SIR by the end of 2007, with a view to integrating it with annual returns," said Rosie Chapman, director of policy and strategy at the Charity Commission.

She said the commission intended to conduct its own review of the SIR to assess charities' opinions, adding that any talk of abolition before then was premature.

The idea for the forms, which are supposed to increase transparency in the sector by providing a summary of a charity's aims, activities and achievements, came from the 2002 Strategy Unit report Public Action, Private Benefit.

It recommended that the commission take the idea forward, which it did this year by issuing the first SIRs. The returns contain questions such as "who benefits from the charity's work?" and "what were the charity's three main fundraising activities in the year and how much did each generate and cost?"

However, the forms have proved unpopular. Integrating them with annual returns was one of 11 recommendations the task force made to ministers last week, although they are not obliged to act on them.

David Membrey, deputy chief executive of the Charity Finance Directors' Group, gave his backing to the proposal. "Members are quite happy to provide information - they just don't want to provide it four or five times," he said.

He also praised the task force for recommending that the Government work with HM Revenue & Customs to reform or clarify the regulations surrounding charitable trading. According to the report, the need to set up separate companies "is a costly requirement that benefits no one".

Membrey said: "That's something we've been saying for a while. Often the cost is so high that charities that only do a small amount of trading find it isn't worth jumping through all the hoops."

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