The Charity Commission has made a number of changes to the content of the annual return for 2018, after an extensive consultation with charities last year.
The regulator has said the new annual return “will make for an easier user experience for charities”, and stresses it will be more proportionate than in the past, with many charities required to answer fewer questions.
Only those with large or complex operations will be required to provide more information. On average, charities completing the annual return will answer 15 fewer questions than in the past.
Changes include amendments to a proposed new question on income received from overseas. Only information about income from overseas governments or quasi-governmental bodies, charities and NGOs will be mandatory for the first year.
“Providing information about income from other overseas institutions and donors will be voluntary for the AR18 and then mandatory in following years,” the regulator said. “The Commission will also introduce a threshold for this information. These changes will ensure that charities can update their records and systems before the question areas become compulsory.”
Proposed new questions on executive pay in charities will be included in the annual return and will ask charities to provide information about the total remuneration received by their staff members, including salary, bonuses, pension contributions, private health care and other benefits in kind.
The Commission will make public how many individuals receive total packages worth upwards of £60,000 in bands (in bands of £10,000 up to £150,000, then in bands of £50,000). The Commission will also require charities to provide information about their highest paid employee, but that information will be held for regulatory purposes, rather than made public.
“The annual return is a vital tool in promoting charities’ accountability to the public, donors and beneficiaries as well as ensuring we have the information we need to be an effective, proportionate, risk-led regulator,” Charity Commission deputy CEO and registrar David Holdsworth said.
“I am grateful to the charities that took part in our extensive consultation on the content of AR18. Today’s report shows that we have listened carefully to charities’ submissions and have made important changes as a result.
“However, in some important areas, including around executive pay, we will require charities to provide us with more detailed information. We know the public care deeply about transparency in this area, and it is vital that charities, and the Commission as regulator, respond constructively to these expectations. I am confident our decision in this area strikes the right balance between transparency and protecting the personal data of individual staff members in charities.
“The Commission engaged in a wide-ranging consultation on AR18, including through targeted user testing. It identified groups of charities most likely to be affected by proposed changes and asked individuals responsible for completing the annual return to test the prototype digital service. The Commission says that it received largely positive feedback about testers’ experience.”