CABINET OFFICE News
Release (CAB023/09) issued by COI News Distribution Service on 31
March 2009
Thousands of small
charities will save up to £5million a year as the Government cuts
red tape by raising the income thresholds above which stricter
accounting rules apply.
From 1 April the Government is giving charities more freedom to
dedicate their time and money to making a difference rather than
paperwork. The changes will make the regulations more
proportionate to the risks so that donors can be confident that
charities are accountable while more of their money will end up
directly helping the charitable cause.
Kevin Brennan, Minister for the Third Sector, said:
"This means more money can get to where it's really
needed. These changes will particularly help small charities that
are playing a vital role in communities suffering the impact of
economic downturn. The Government has a £42million package of
recession support for charities and will continue to make
important changes such as these to help them thrive."
Andrew Hind, Chief Executive of the Charity Commission said,
"Today's welcome changes to financial thresholds should
make a material difference to nearly 50,000 charities as they
report on their finances and activities - striking an important
balance between proportionality and accountability."
Key income threshold changes, coming into force from 1 April include:
* Raising the threshold above which charities prepare accruals
accounts from £100,000 to £250,000 - around 11,700 in this
category will benefit.
* Raising the threshold above which accounts must undergo
external scrutiny from £10,000 to £25,000 - benefiting around
37,000 charities.
* Increasing in the threshold above which charities submit annual
accounts and Trustees Annual Reports to the Charity Commission
from £10,000 to £25,000 - this will benefit around 23,000 small charities.
Ron Norey of the Association of Church Accountants and
Treasurers, said:
"The Association of Church Accountants and Treasurers warmly
welcomes the increase in the Accruals threshold from £100,000 to
£250,000. Church treasurers are generally ordinary church member
volunteers, and though they must have basic skills in simple
book-keeping and accounts, many are less able to prepare the more
demanding statements obligatory in the Accruals basis.
"The level of expertise they perceive to be required deters
church members from volunteering to be treasurer. Extending the
base for the less demanding Receipts and Payments basis should
also provide a considerable boost to the recruitment of new and
successor candidates to fill the post."
Wendy Dacey, Village Halls Adviser for the Community Council for
Berkshire said:
"I am delighted that the threshold at which charities need
to have their accounts externally examined, is to rise from
£10,000 to £25,000 from 1 April 2009. Many village halls are
charities, run by volunteers, but as public buildings have many
rules and regulations which they have to comply with.
"Village hall committees have sometimes had to pay someone
to examine the accounts so this will result in cost saving and is
particularly important when halls had exceeded the £10,000
threshold because they had received a grant to carry out
improvements in the halls. This ring-fenced money sometimes meant
that halls then incurred a cost which would not otherwise have
come about."
All charities, including those with annual incomes under £25,000
must prepare accounts and make them available on request. The
changes to accounting thresholds followed a consultation held
jointly by the Office of the Third Sector in the Cabinet Office
and the Charity Commission.
Notes to editors
1. The Order making the necessary amendments
and an explanatory note can be found at http://www.opsi.gov.uk/si/si200905
, under number 508.
2. Today's threshold changes are the result of a
consultation on financial thresholds mentioned in the Charities
Act 2006. This consultation was run jointly by the Office of the
Third Sector and the Charity Commission in 2008. The
Government's response to the consultation was published on 1
September 2008.
3. The Charity Commission is the independent regulator for
charitable activity in England and Wales. See http://www.charitycommission.gov.uk
for further information or call our contact centre on 0845 300 0218.
Cabinet Office Press Office
http://www.cabinetoffice.gov.uk