Get ready for changes to Annual Return

Charities should be preparing for important changes in the data required for their annual return following a review by the Charity Commission.

The commission has made a number of amendments to the content of the annual return for 2018 (AR18) after a consultation exercise with charities.

All charities whose annual income exceeds £10,000 must complete the annual return and AR18 applies to all charities with financial years ending from 1 January 2018. Charities have 10 months from the end of the financial year to complete the return.

While the administrative burden will be reduced in some aspects – including 15 fewer questions than in the past – but there are a range of new questions that will require forward planning.

They include:

• Charities will have to disclose details of executive pay. You will be asked for details of salary, bonuses, pensions and benefits in kind and will publish how many individuals receive total packages worth upwards of £60,000 in bands (in bands of £10,000 up to £150,000, then in bands of £50,000).
• The commission will also ask for details about the highest paid employee, but will not make this public.
• For the first year only income from overseas governments, quasi-governmental bodies, charities or NGOs will need to be declared, but in future years all overseas income from other institutions or donors will also need to be declared.

The Commission has decided not to ask charities if they are claiming rate relief and Gift Aid in the 2018 iteration of the annual return.

Michaela Johns says: “The annual return is a vital tool in ensuring the accountability and transparency of any charitable organisation. While many will be pleased that the commission has listened to feedback, the annual return remains a potentially very time-consuming process that requires careful planning.

“Charities should check how these revisions affect them as you may be required to amend your information management to ensure you have the data you need to respond.”

For more information on the changes and how to comply, contact Michaela Johns on 023 8046 1256.