The Charity Commission in England and Wales periodically review the questions it asks as part of its Annual Return process to address what it believes to be current areas of concern. The Commission has now carried out its most recent review and has published the changes it will apply for the next few years. These will apply for Returns for periods ending after 1 January 2023 and a number of changes have been introduced.
The information required will depend on the income of the charity with only those with income of more than £500,000 required to complete all of the questions.
What are the changes to annual return questions?
Questions regarding funding
There are additional questions regarding funding. Charities with income in excess of £100,000 will need to give the value of the highest donations from corporate and individual donors and from related parties. For funding received from overseas details of how the money was received if outside the regulated banking sector is now required.
Formal Written Agreements
For charities with partners delivering charitable activities overseas, a new question asks whether there are formal written agreements with the partners.
Addresses
More details are required (for the first year only) regarding addresses the charity uses.
Definitions of areas
There are a number of other minor changes and the definitions of a number of areas have been revised to make these clearer. For instance questions no longer ask whether you “operate” outside the UK but whether you “deliver charitable activities” outside the UK.
Further disclosure regarding governance
Further disclosure regarding governance will be required. Under the current reporting requirements, information on policies and procedures is included on the database of charity details (to be updated on a real time basis), but this is being moved back on to the Annual Return and the number of policies and procedures on which the charity needs to report increases to 14 from 7, including new requirements for policies on trustee expenses, bullying and harassment, social media, campaigning and political activity and engaging external speakers.
Not all of these will be relevant, particularly the last two, but where they are relevant and these policies do not exist it might be appropriate to develop these, as the existence or not of these policies is shown on public record. Further information will be required regarding safeguarding and risk. These requirements apply to all charities except subsidiaries.
Reporting on specific events
A new section will be introduced which will require charities to report on specific events, such as the Covid pandemic, to be specified by the Charity Commission each year. It might be that this section will seldom or possibly never be implemented, but it is included to give the Charity Commission power to collect information in these circumstances.
Trustees and management completing these returns should acquaint themselves with the additional information required and make sure that this will be available in good time to file the return by the due date. In particular, where formal policies and procedures do not exist for the areas identified it might be appropriate to start drafting and adopting these, or to agree formal written agreements with overseas partners.