Number of annual return questions increases amid ‘unnecessary red tape’ fears

The Charity Commission insists it has listened to concerns from the sector as it finalises changes to the annual return, which includes increasing the number of questions being set for charities.

The regulator has published an updated set of questions for the new annual return, in response to feedback from the charity sector and public. Views during the consultation included fears that the changes would increase red tape and confusion among charities.

The changes will see the maximum number of questions charities can be asked increased from 36 to 49, although this is three fewer than the 52 limit that had originally been mooted by the regulator in June last year.

Also, the number of questions all charities will be asked will increase from 16 to 26, less than the 32 questions originally proposed by the regulator.

Other changes to the 2023 annual return include income thresholds for five of the new questions to “reduce the burden for smaller charities”.

In addition, 19 questions have been reworded “to improve clarity”. The regulator has also updated guidance aimed at supporting charities to “answer questions quickly and accurately”.

An aim of the changes is for charities to include more detailed data to help the regulator better identify risks and understand the sector.

But accountancy body The Institute of Chartered Accountants in England and Wales (ICAEW) in its consultation response said there were concerns “about unnecessary red tape, data reliability and confusion about the information being sought”.

The regulator has pledged to publish a new guide this month to provide further clarity to charities regarding their annual return, which all charities with annual incomes of £10,000 or more must complete with 10 months of the end of their financial reporting period.

“I’d like to thank all of those who took the time to respond to our consultation,” said Charity Commission chief executive Helen Stephenson.

“We have listened to feedback and are now introducing changes that will improve the annual return for charities and allow us to regulate more effectively.

“We know that it will take time for charities to adjust their reporting and so we will be publishing a guide in January to help trustees and nominated contacts as they look to file their returns next year.

“I’m delighted we have reached the latest milestone in our ambitious strategy to become a more data-driven regulator and help ensure we are serving the public and sector as best we can.”