What you need to know about charity accounts

Charities are spectacularly selfless. Though it’s tough to think of them as businesses, that’s what they are! And like any business, they must follow the accounting framework set out by the government’s charity commission to ensure their income, assets, and tax is recorded and observed. Here are 5 ways you can prepare your charity commission accounts, with or without the help of charity accountants:

1. Join the HMRC charity registration

Any charitable organisation can register their details with HM Revenue and Customs’ charity registration https://www.gov.uk/charity-recognition-hmrc By doing so, it means your charity can claim tax back on things like Gift Aid donations.

2. Read up on the trustees’ annual report

What you include in your trustees’ annual report depends on how much your charity earns annually along with the value of any assets you use to run your business. Typically, you’ll include how much money you’ve earned, where it’s come from, and what you’ve spent it on.

3. Learn whether your charity requires an audit

If your charitable organisation earns over £1m or £250k plus £3.6m in assets, its trustees are required to arrange a compulsory audit or independent examination. You can read more about the charity audit process in our recent article.

4. Ensure you know how to complete an annual return

Completing a charity’s annual return includes three documents – a performance report, an annual return form, and submitting the annual fee. If you need advice filling out the above documents, we recommended talking to a CIMA & ICAEW qualified charity accountant beforehand.

5. Entrust charity accountants to advise and assist you

Charity accountants are well-versed in the above steps plus charity SORP, which is The Charities Statement of Recommended Practise. If you’d like to talk to a charity accountant with decades of experience in your area, please call Harris Lacey and Swain on 01482 646440 or visit our website here