Ensure that public info about your charity is up to date – catch up with the latest changes to the Annual Return 2018
In England and Wales, all charities above £10,000 income and all Charitable Incorporated Organisations (CIOs) must complete an Annual Return (AR). The new AR for 2018 applies to charities with financial years ending from 1 January 2018. The collected data helps to populate the online register of charities. The outcomes of the Charity Commission’s recent consultation on changes to it have just been announced – so we had a look at what they mean for charities on the ground.
What DSC asked for in the consultation
We wanted the Commission to make sure that any new questions in the AR 2018 are proportionate and do not add an unnecessary burden for charities. We also suggested they check whether the information they are looking for is not already collected elsewhere (for example in charity accounts). Terms have to be clearly defined and explained so that robust data can be gathered, and also to give the right context when information is displayed in the online register of charities.
Importantly the Commission wants to move to online submission of information. Those who might have limited online access or ‘online literacy’ therefore need accessible help. A properly staffed helpline specifically for questions on the new AR 2018 and the related online system, plus written guidance, could help ensure a smooth roll out. We’ll have to see whether the commission acts on this.
If you want to find out more about DSC’s longer ‘wish-list’, download our consultation submission.
The good news first
The new AR 2018 will be paired with an online Update Charity Detail (UCD) function. This will allow continual updating of basic charity information. Let’s assume your trustees change or you move and need to update your address. You can record these changes now right away online. The Commission also carried out some user testing and people gave positive feedback on this new format. Charities will also not have to submit information on whether they are claiming rate relief for the premises they use or the amount of gift aid they have claimed as originally proposed. They’ll just have to provide only their HMRC number instead.
What else is new?
The new AR 2018 will ask charities to submit information on overseas income. How this will be done will depend on the charity’s level of income and how much comes from these sources – a key change from the consultation. For this year, only information on income from overseas governments or quasi-governmental bodies, charities and NGOs will be requested. The Commission expects that charities should hold and account for this information already.
However, in the following years they’ll require charities to you are also expected to provide information on income from other overseas institutions and donors as well. This should give charities time to prepare and collect the information now. The Commission will also introduce thresholds so that very small charities have to submit less detailed information on overseas income (see more on page 11 here)
There will be new questions on staff pay (including salary, bonuses, pension contributions, private health care and other benefits in kind). This information will be made public but only anonymously and ‘in packages of total employee benefits’ worth over £60,000, and information will be displayed in bands. The main effect of this will be to expand the reporting on salaries over £60,000 in the Annual Return to those charities below the thresholds requiring accruals accounts. How many will there really be?
Things to keep an eye on
Although we haven’t got all we wanted, it’s important to point out that the Commission really listens and for a government body, are generally quite good at consulting. They provide their reasoning on how they took to the sector’s concerns on board in a detailed response here. This represents best practice and we should commend them for their approach.
We’re still concerned though about the feasibility of tracking all the overseas income in future years and it could turn out that this may not be workable or yield very useful data. We’ll have to see how it all pans out over time and monitor if charities experience an unreasonable additional workload.
We’ll also keep pushing for clear definitions and accessible help and advice to be made available in a way that really helps charities to cope with the change. So please do let us know how the rollout of the new AR 2018 affects you via [email protected], or you can contact the Charity Commission via their helpline which you can find here.
