Annual Returns 2023 Guidance Released

On 24 February the Charity Commission published its guidance on the questions in the 2023 annual return, as well as updated general annual return guidance. The new annual return will apply to all annual returns for financial years on or after 1 January 2023. The new annual return contains a number of new questions, following a consultation last year. 

The annual return is a good indicator of trends in the charity sector, and the changes to the annual return aim to obtain improved information, as well as reducing the administrative burden, especially on smaller charities. This will aid the Commission to develop more refined policies and be a more proactive, targeted regulator.

The changes include:

• An income breakdown, as reliance on a single source of income can reduce a charity’s financial resilience.

• The value of the charity’s single highest value donation received from a corporate donor (if the charity’s gross income is over £100,000). The reasoning for this question is that an increased understanding of financial dependency makes it easier to detect potential conflicts of interest.

• Whether the charity spent any funds outside the UK, and in particular whether any funds passed through an unregulated banking system. This will reveal the extent to which the trustees are complying with their duty to safeguard the assets of the charity.

• Whether any of the charity’s employees receive total employment benefits of £60,000 or more, and the value of the total employee benefits paid to the charity’s highest paid employee. Increased transparency will increase public trust and confidence in the charity sector. 

The new questions are available here

What’s next? 

Once the” My Charity Commission Account” service is up and running (due in “Spring 2023”) it will be possible to complete annual returns through that account. Charity contacts are currently encouraged to register for the service here. Until then, annual returns are to be submitted through the normal online application service.

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