Charity annual return 2018

The annual return will be revised following extensive consultation with the charity sector.  The new return will be available from the end of August and will include some new questions that you can start preparing for now.  The Charity Commission recognize that for some charities the new questions will create additional work and therefore have made some of the questions optional this year to allow you time to put systems in place to collect the required information in the future.

Overseas expenditure

The current questions about charitable expenditure overseas will be further expanded to establish how charities transfer and monitor money they have sent overseas.  This may well require that your record keeping and other systems are updated so that you can produce this information.  The further information that will be required in this respect is as follows:-

When spending money outside England and Wales, did your charity transfer money outside of the regulated banking system?

What methods to transfer money did the charity use and what was the value?

  • cash courier
  • other charities or non-governmental organizations and non-profit organizations (NGOs/NPOs)
  • money service business (MSB)
  • informal money transfer systems
  • online payment methods (for example PayPal)
  • other

Does the charity have monitoring controls in place to monitor overseas expenditure?

Are the trustees satisfied that the charity's risk management policy and procedures adequately address the risks to the charity arising from its activities and/or where it operates?

Because accounting systems and controls may need to be updated these questions about methods of transferring money outside the regulated banking system, including details about the monitoring controls and risk management in place over such payments, will be optional for the 2018 annual return.  They will be mandatory for the annual return 2019 onwards.

Income from outside the UK

To get a better understanding of the income sources from outside of the UK the Charity Commission is also introducing questions about the breakdown of sources of income from each country a charity receives funds from.

The options provided for you to choose from are:

  • overseas governments or quasi government bodies
  • overseas charities, non-governmental organizations or non-profit organizations (NGOs/NPOs)
  • other overseas institutions (for example private company donations)
  • individual donors resident overseas
  • unknown

Once again some charities may need to make changes to their financial systems to collect and sort the required information more easily.  For this reason, those questions relating to other private institutions outside the UK (other than charities, Non-Governmental Organizations and Non-Profit Organizations) and individual donors outside the UK will be optional to answer for the 2018 annual return but will be mandatory from 2019 onwards.

Salary and benefits in charities

Surveys into the public’s trust and confidence in charities shows that there is concern about levels of pay in charities.  As a result of this the Charity Commission will be asking charities to provide more information about salaries paid in an effort to increase accountability and transparency.  The 2018 annual return we will ask for a breakdown of salaries across income bands, and the amount of total employee benefits for the highest paid member of staff, however, in response to concerns raised during the consultation they will not publish details of benefits given to the paid member of staff on the public register.