Year End Accounts - FAQs

Do I need to create year-end accounts?

Yes! All charities (whether registered with the commission or not) must prepare accounts, and all registered charities must prepare a Trustees’ Annual Report (TAR).

All registered CIOs (irrespective of income) and all other registered charities with a gross yearly income of over £25,000 have a duty to then submit their accounts and Trustees’ Annual Report to the Charity Commission.

Note: In addition to submitting accounts, an annual return form must also be submitted for all registered CIOs (irrespective of income) and all other registered charities with a gross yearly income of over £10,000 (charities that are below this threshold still have an obligation to keep their registered details held by the Charity Commission up to date).

What type of accounts do I need to create?

Receipts & Payments Accounts

Charities in the UK with an annual income below £250,000, will often be able to prepare simple Receipts & Payments accounts (as long as they are not charitable companies). Receipts & Payments accounts are a simple form of accounting that consists of a summary of all monies received and paid via the bank and in cash by the charity during its financial year, along with a statement of balances.

The template for creating Receipts and Payments accounts can be found on the ***UK Charity Commission website here***. Typically, you just need to enter a summary of your income for the year in section A1, a summary of Expenditure for the year in section A3, and your balance sheet totals in section B1.

Accruals Based Accounts

Charities with annual income over £250,000, or that are charitable companies, will need to prepare accounts on an accruals basis that comply with the Charities SORP. Accounts prepared using the accruals basis allocate the costs or income of a particular activity according to when the liability is incurred, or when there is entitlement or certainty about income. This is not necessarily the date on which money is received or paid out.

Charities should carefully check what type of accounts they need to prepare and we recommend that you speak to your Independent Examiner to make sure.

Can I create my own accounts?

Yes, however preparing accounts that comply with the Charities SORP can sometimes become quite complicated and you may well need help from someone who is familiar with the Charities SORP (such as your Independent Examiner).

Preparing year-end accounts, particularly for charities with an income over £250,000, involves much more than just taking financial reports from your accounting software and writing a trustees report - numerous legal disclosures have to be included in order to comply with the Charities SORP.

Will I need my accounts to be independently examined?

If the gross yearly income of your charity is over £25,000, then you will need your accounts to be independently examined.

Whilst the creation of year-end accounts and the independent examination of year-end accounts are two separate tasks, typically most charities pay an Independent Examiner to take care of both tasks.

Here is an Accruals Accounting Year-End Checklist for Charities using ExpensePlus - ***CLICK HERE*** to view. This has kindly been provided by Wyatt & Co who provide independent examination and accounts preparation services to churches and charities.

What do I do with my signed-off year-end accounts?

Once your accounts are completed, they will need to be submitted to the Charity Commission (and Companies House too if your charity is a charitable company). Signed-off accounts must be submitted within 10 months of each financial year-end to the Charity Commission, and within 9 months to Companies House, if applicable.