Charity Management

Penalties being considered for late filers, says Charity Commission

28 September 2012

Of the 400 charities that were late filing their annual account information for 2011 had done the hard part ahead of time and even had the accounts signed off – they just hadn’t filed the information online and on time with the Charity Commission.

The regulator’s chief executive presented the findings at is annual public meeting on 18 September. In a comment published on the same day[i], Sam Younger said the regulator was considering some tough penalty measures to deal with this relaxed attitude to their legal duties.
 
He said: “My view is that these findings bolster the case for introducing penalties for charities that are late in filing their accounts with us. In his recent review of the Charities Act, Lord Hodgson picked up on the suggestion that charities that fail to meet their deadline be barred from claiming gift aid. This recommendation couldn't be implemented over night if it were accepted – it would require legislative change and a lot of planning as to the practicalities involved for us and HMRC.”
 
In his presentation, Younger revealed that nearly a quarter (23%) of defaulting charities with incomes of over £250,000 had filed their accounts late for all of the previous five financial years, and that only around quarter of the sample (27% of charities with incomes of over £250k; 24% of those with incomes under £250k) had never previously defaulted on their reporting requirements. Furthermore, 39% of late filers that were also companies had filed their accounts on time with Companies House, suggesting charities were either more aware of or concerned about that regulator's requirements.
 
Other key findings from the research include:
  • Faith/religious organisations are over-represented among larger late-filing charities, making up 28% of late filers with incomes of £250,00 or above;
  • Over half (52%) of smaller late-filers and nearly a quarter (24%) of larger late filers submitted accounts classed as ‘poor’ - meaning that they were not SORP compliant, were missing important sections, such as the trustees' annual report, or were simple receipts and payments accounts, despite the charity in question being over the threshold for submitting full accruals accounts (threshold is an annual income of £250,000)
  • Only 8% of smaller late-filers and 12% of larger late-filers submitted accounts that were classed as 'good', meaning they included all required information and were above average in quality and presentation
  • 53%of all registered charities leave filing their online Annual Return to last four weeks before their deadline
  • Over all, 86% of all registered charities filed annual accounts on time in 2011-12

 [1] Signed, sealed, defaulted. Why late filing of charity documents is avoidable - and unacceptable

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