Avoid Penalties: A Guide to Submitting Charity Accounts

Submitting your charity accounts might seem like a daunting task, but it’s absolutely essential for keeping your organisation compliant, building trust with funders, and being transparent with the public. Whether you’re running a small charity or managing a larger one, this guide will help you navigate the process, avoid common mistakes, and make the most of expert help if you need it. 

What Are Charity Accounts, and Why Are They Necessary? 

Think of charity accounts as the story of your charity’s year in numbers. They record your income, spending, assets, and liabilities, giving a clear picture of your financial health. Depending on the size of your charity, these accounts can range from a simple summary to a more detailed report that ticks all the legal boxes. 

But charity accounts are about more than just figures, they’re about trust. They show your funders and the public that you’re managing their contributions responsibly and staying focused on your mission. It’s your opportunity to prove your charity’s accountability and integrity. 

Types of Charity Accounts

Different charities have different needs, so the way you prepare your accounts depends on your size and income. Here’s a quick breakdown: 

• Receipts and Payments Accounts:
  ​Perfect for smaller charities (income under £250,000) without complex assets. This straightforward method tracks what money has come in and gone out during the year - simple and effective for basic financial management. 

• Accrual Accounts:
  If your charity’s income is over £250,000, you’ll need to prepare accrual accounts. These are a bit more detailed, capturing not just cash transactions but also assets, liabilities, and future financial commitments. It gives a fuller picture of your charity’s financial health. 

• Trustees’ Annual Report:
  ​This is where the numbers come to life. The Trustees’ Annual Report tells the story behind your financial statements, covering your charity’s objectives, achievements, and how you’re making a difference. It’s an essential part of your submission. 

Key Steps to Submit Charity Accounts  

1. Get Your Accounts Ready - First, make sure your accounts are in the right format. Smaller charities can use receipts and payments accounts, while larger ones need accrual accounts. Not sure which one applies to you? Check out the Charity Commission’s guide for clarity. 
    
2. Arrange an Independent Examination or Audit - Depending on your income and assets, your accounts might need an independent examination or full audit. For example, charities with income between £25,000 and £1 million usually require an independent examination, while those over £1 million need an audit. Learn more here.  
    
3. Complete Your Annual Return - Most charities need to complete an Annual Return for the Charity Commission, which collects details about your finances and governance. It’s important to get this right, as it becomes part of your public record. 
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4. File Online - Once everything is ready, log in to the Charity Commission’s website to upload your documents, the process of doing this has changed in recent years, find updated guidance here. Make sure everything is clearly labelled and formatted to avoid delays or issues. 

Common Mistakes to Watch Out For:

• Missing Deadlines - This is a big one. Late submissions can lead to fines, reputational damage, or even removal from the Charity Register. Set reminders and create a schedule to stay ahead of deadlines. 
• Errors in Financial Data - Mistakes in your figures can cause compliance headaches. Double-check everything, and if in doubt, get a professional accountant to review your work. 
• Forgetting the Trustees’ Annual Report - This isn’t optional. Make sure your report highlights your achievements and ties in with your financial statements. 
• Skipping Professional Reviews - A qualified professional can help ensure your accounts are accurate, compliant, and stress-free.  

​Why Getting Expert Help is Worth It 

Let’s face it - charity accounting can be tricky. That’s where expert help comes in. Professionals ensure your accounts meet all the legal requirements, reducing the risk of penalties and protecting your charity’s reputation. They also save you valuable time, so you can focus on your mission instead of the paperwork. What’s more, experts stay on top of ever-changing regulations, so you don’t have to. It’s a win-win. If you’re curious about how trustees can make sure charity funds are used effectively, check out this article.