Cabinet Office
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Plans to cut charity red tape go to consultation
Phil Hope, Minister for the Third Sector, and Dame Suzi Leather, Chair of the Charity Commission, have today jointly published, for consultation, a package of proposals to increase various financial thresholds for charities. If implemented, these would free up resources for up to 75% (125,000) of registered main charities and help ensure they are not disproportionately burdened by regulation.
The aim of the proposals is to reduce administrative burdens on charities while maintaining an effective regulatory framework. The main proposals are:
* only registered charities with an income above £25,000 would need to prepare a Trustees Annual Return, currently a requirement for all registered charities;
* the income threshold of £10,000, above which charities must submit their annual accounts to the Charity Commission would increase to £25,000;
* the income threshold of £10,000, above which charities must have their accounts externally examined, would increase to £25,000; and
* the threshold of £100,000, above which a charity must prepare accruals accounts (as opposed to simpler receipts and payments accounts), would be raised to £250,000. These measures will enable thousands of registered charities to meet their accounting and reporting obligations in a simpler and less expensive way.
Phil Hope, Minister for the Third Sector said:
'There are thousands of small charities that bring enormous benefits to our communities. I want to ensure that they are able to focus as much of their time and energy as possible on changing peoples lives. Of course, effective regulation of charities is important in maintaining high levels of public trust and confidence in the sector. These proposals reach a better balance that would reduce the burden of regulation for up to 125,000 charities whilst retaining a proportionate level of accountability and transparency.'
Dame Suzi, Leather, Chair of the Charity Commission said,
'Nearly three quarters of registered charities would benefit from a reduced regulatory burden under these recommendations. This would make things easier for these small charities and their trustees without significantly reducing the accountability and transparency which is crucial to maintaining the public's trust and confidence in the charity sector as a whole. We are keen to hear what charities and the wider public think and would urge as many as possible to let us have their views.'
The consultation will close on 31 March 2008. Following the consultation process work will begin on implementing the changes later in 2008.
The review of financial thresholds was a commitment that the Government made during the passage of the Charities Bill through Parliament. This consultation document presents the outcome of that review and invites comment.
Also today both the Cabinet Office and Charity Commission published their second annual simplification plans that set out a number of measures to reduce the burden of red tape on charities by 2010.
Notes to Editors
1. The consultation document is available at: http://ww2charity/enhancingcharities/consultations.asp
2. The Cabinet Office and Charity Commission have both published simplification plans today as part of a cross government initiative to reduce the administrative burden of regulation. For further information please see: http://bre.berr.gov.uk/regulation/reform/simplifying/plans.asp
3. The Charities Act 2006 aims to support a dynamic and vibrant sector, ensuring that it continues to enjoy high levels of public confidence. For further information please see: http://www.cabinetoffice.gov.uk/third_sector/law_and_regulation/charities_act_2006.aspx
