A Comprehensive Guide To Charity Reporting and Annual Accounts

By Linda RoperDecember 6, 2022

Charity reporting is an important aspect of charity governance. In this guide, we will discuss the different types of charity reports, who writes an annual report, what information needs to be included in them, and the deadlines for submitting them. If you are a charity trustee or director, then this guide is for you!A charity annual report on a table with a pen, glasses and a cup of coffeeTable of Contents

What Accounts Does a Charity Need To File?

When it comes to charity accounts, a charity needs to file the following:

  1. Financial statements

  2. Transaction documents

  3. Bank statements

  4. Invoices from suppliers

Accounting is an essential part of any charity's operations, as it helps to ensure that the organisation is financially sound and effectively managing its resources.

In addition, charities must also comply with specific reporting requirements, such as submitting their annual accounts to the Charity Commission or filing charity tax returns with HMRC.

VAT for charities

While many people think charities don’t need to pay VAT, the fact is, more often than not, they do, and it can be quite complicated to file. For help and support, please read our guide on VAT for Charities.

Important information for trustees and directors

If you are a charity trustee or director, it is important to ensure that you are familiar with all of the accounting records and reporting requirements that apply to your organisation. This will help you stay on top of your charity's finances and ensure that you are meeting all of the necessary reporting deadlines. With the right knowledge and tools, you can help your charity thrive financially and achieve its mission.

For more information about reimbursing volunteers who work for your organisation, read our guide here.

Do Charities Have To Produce An Annual Report?

Yes - an annual report must be submitted within 10 months of the end of your financial year. So let’s say your financial year end was on the 31st of December 2022, then your deadline to submit would be the 31st of October of the following year.

An annual report can be used to demonstrate a charity’s impact and effectiveness in achieving its mission. At the core of any effective annual report is a clear and compelling narrative that highlights the organisation's key accomplishments, as well as highlighting any challenges or setbacks that it may have faced.

What information to submit

But the information you need to submit depends on how much the organisation has made.

Under £10,000

Under £10,000; You need to include your income and spending. You should also provide a trustees’ annual report if you’re registered and have it available upon request.

£10,000 to £25,000

£10,000 to £25,000 in income; You need to answer a series of question about your activities which can be done here.

Above £25,000

Income above £25,000; You need to answer a series of questions and get your accounts checked as well as providing copies of your trustee annual report, accounts and independent examiner’s report.

In addition to this, you’ll need a full comprehensive audit should your income exceed £1 million, or you have gross assets over £3.26 million and an income of over £250,000. Either the assets will be audited or independently examined by a member of a body approved by the Charity Commission. This audit will then form part of the annual return and must be submitted with your annual report.

Charity annual reports guideWho Writes and Reads An Annual Charity Report?

Annual charity reports are typically produced by charity leadership teams and trustees, with input from key staff members. They may also be reviewed or approved by external stakeholders, including funders, donors, and regulatory bodies.

Reports are broadly read by various groups of stakeholders within the charity sector, including supporters, volunteers, regulatory bodies, and members of the public.

What To Include In A Charity Annual Report?

There is no single template for annual charity reports, as the content and format of these reports can vary depending on a number of factors, including the size and scale of the organisation.

In general, a charities annual report must include:

  • Your charity’s legal structure

  • Its’ income

  • The value of the assets it holds

That’s why as a charity, bookkeeping should always be an important aspect of your organisation. Even if you’re not required to register with the Charity Commission, you should strive to keep detailed accounting records, such as receipts, records of grants, and cashbooks.

Do Charities Have To File Accounts?

Yes, most charities are required to file their annual accounts with relevant regulatory bodies. In some cases, charities may also be required to submit tax filings or other reports related to their regulatory compliance status.

While this may seem like a burdensome task, it is important for charities to maintain accurate financial records and ensure that their accounts are up-to-date in order to demonstrate their impact and compliance with regulatory requirements.

filing charity accountsDo Charity Accounts Need To Be Audited?

In some cases, yes. The exact answer to this question will depend on the reporting requirements set by your charity's regulatory body and any external funders or donors.

In some cases, charities may be required to have their annual accounts audited by an independent auditor in order to ensure that they are accurate and compliant with reporting standards.

If you are unsure about whether or not your charity needs to have its accounts audited, it is important to consult the guidelines set by your regulatory body and any external funders or donors.

Regardless of whether or not you are required to publish an annual charity report, it is crucial that your organisation maintains accurate financial records and engages in regular reporting activities in order to demonstrate its impact and compliance with reporting requirements.