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Charities

The environment in which charities operate is experiencing continuous and rapid change. This leads to opportunities for charities to develop but can also lead to increased administration and regulatory burdens.

The Charities Act 2006 was passed by Parliament in November 2006 and some parts came into force on 27th February 2007. Most of the rest will come into force by early 2008.

Smaller charities will no longer require permission from the Charity Commission in certain circumstances e.g. changing their governing document.

The Charity Commission continues to increase its monitoring of charity accounts and its programme of review visits.

Ellis Lloyd Jones has over 20 years experience in both preparing and auditing Charity financial statements and advising Trustees in their duties. We can help with understanding and dealing with the regulatory burdens that the charity faces. We can help the Trustees to understand the changes and requirements of the new Charities Act and how they affect the charity.

If you think your charity may need to have an audit you can use the information below as a guide or call Kara Williams or Neville Ellis.

Audit Thresholds

Audit thresholds for non company charities and charitable companies have been amended for accounting periods beginning on or after 27 February 2007.

For non-company (unincorporated) charities, an audit is required if a charity has:

• gross annual income over £500,000; or
• an aggregate value of assets over £2.8million and gross annual income over £100,000.

Below the above thresholds, an independent examiner can be used instead of an auditor. An independent examination is not required if the charity's gross income is £10,000 or less.

For charitable companies, an audit is required if a charity has:

• gross annual income over £500,000; or
• an aggregate value of assets over £2.8million.

Company charities with an income between £90,000 and £500,000 and assets of £2.8million or less are not required to have their accounts audited if they provide an accountant's report. For a company charity with income of £90,000 or less, neither a professional audit nor an accountant's report is required unless its assets are over £2.8million.

Here are some useful links on this subject: