Setting up or running a charity for the first time?

Written by B20 Ltd on 30 October 2014.

Charity AccountingFor the sake of this month’s blog, we will assume that you have established that you are indeed a charity according to law in England and Wales (if you have any doubt, the government’s handy 18 page document of definitions and flowcharts will clarify things in no time!

As a charity, there are some essential accounting deliverables, such as an Annual Report, a set of accounts and an Annual Return. It’s also important to be aware that independent examinations or professional audit of a charity’s accounts may sometimes be necessary.

There are different requirements for charities depending on size and type of charity, and to understand how it applies to your charity to need to understand the following:

  • Is your charity also a company or Charitable Incorporated Organisation
  • Its income for the current financial year
  • The value of its assets
  • Whether or not it is require to be registered as a charity

The answers to these questions will determine the type of account which must be prepared, the information which is needed for the Trustees’ Annual Report, whether the accounts require an independent examination or audit and what information must be sent to the Charity Commission.

There’s a fine line between what is a legal requirement from an accounting point of view, and what is recommended practise. In short, the legal requirements for all charities include keeping accounting records and preparing annual reports which must be made available to the public on request. Records should be kept for at least 6 years.

At B20 we are well versed in the accounting requirements of charities. We can handle your day to day accounting needs including payroll and bookkeeping, and annual returns, audits and independent examinations.

For more information on how we can support your charity contact B20 Ltd.

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