Do charities need to have audited accounts?

[gouldie0]

Hi All,

Hoping you can help, a friend has decided to start a charity (a trust i think) for animals; nothing to big but would like to make a difference. She's had several bits of advice and is slightly concerned that charities are required to have audited accounts annually. Now if it's a small charity bringing in around £2,000 a year, she's not wanting to spend a large proportion of that on accountancy fee's.

So my question is - What are the requirements for charities on an annual basis for accounts submissions?

Thanks in advance for all your help.

Kind Regards

Neil

 

[David Griffiths]

Look on the Charity Commission website where there is plenty of guidance on requirements for charities and accounts.

 

[gouldie0]

Hi David,

Thanks for the info, i'll point in that direction.

Kind Regards

Neil

 

[Percybridge]

If the charity's income exceeds £25,000, the accounts must be audited and an annual report completed. There is no audit requirement for charities under £25k.
If the income is more than £10,000, an annual return must be completed.

 

[gouldie0]

If the charity's income exceeds £25,000, the accounts must be audited and an annual report completed. There is no audit requirement for charities under £25k.
If the income is more than £10,000, an annual return must be completed.

Not sure about the return figure but it's actually if your income is less than £250,000 then you can complete your accounts on a 'payments and receipts' basis.

 

[Percybridge]

http://www.charity-commission.gov.uk/publications/cc15b.asp

 

[gouldie0]

Thanks Percybridge, i see the information now. I've also just copied some of the wording from the main page.

Regards

Neil

Help and advice for small charities

Over 85% of registered charities count as small and are able to take advantage of simpler reporting and accounting arrangements. The Commission produces helpful templates for you to use and offers worked examples and guidance. Please see our guidance for small charities to understand your options for preparing accounts and the role of the SORP.

Receipts and payments accounts

If your charity has a gross income of £250,000 or less and is not a company then you may be able to prepare receipts and payments accounts that provide a simple and flexible basis for accounts preparation.


For financial years ending on or after 1 April 2009, a non-company charity may opt to prepare its accounts on a receipts and payments basis where its gross income is £250,000 or less. For financial years ending before 1 April 2009 this income threshold is set at the lower level of £100,000. See Guidance for non-company charities with an income £250,000 or less for further information.


The Commission publishes guidance to assist trustees and those preparing charity accounts including a Receipts and Payments Accounts Pack for those choosing to prepare their accounts on this simpler basis.


Accruals accounts for small non-company charities

If your charity is below the audit threshold and prepares accruals accounts then the SORP applies but there are a number of concessions for smaller charities explained in Appendix 5 of the SORP (new link). Smaller charities can also adapt and use our Accruals Accounts Pack when preparing their accounts.

 

[David Griffiths]

If the charity's income exceeds £25,000, the accounts must be audited and an annual report completed. There is no audit requirement for charities under £25k.
If the income is more than £10,000, an annual return must be completed.

Sorry but that's just not correct. A company with income not exceeding £500,000 can opt for an independent examination, which is a whole lot different from an audit

Here

 

[Percybridge]

Sorry but that's just not correct. A company with income not exceeding £500,000 can opt for an independent examination, which is a whole lot different from an audit

Here

Neil,
David is correct.
Please ignore my post.

 

[Blackberry]

If your income is under £250k you probably wont need an audit unless:

1. your expenses are over £250k
2. there is a requirement in the charities constitution to have an audit

regardless of whether an audit is required or not the accounts will still have to comply with the latest SORP and chances are you'll need an accountant to do this - many accountants will do this work for a loss, especially if the chairty is small

 

[maxine]

You might find this lady's blog interesting as she regularly writes about charity accounting

http://tonihunter.com/tag/charities/

 

[Zeno]

And you can ignore all the advice from the Sassenachs as it is different in Scotland. Look here :- http://www.oscr.org.uk/

From the level you have described no audit is required and your inpedendant examiner need not be qualified (As in a chartered accountant, auditor).