News

CFG urges Commission to scrap ‘unnecessary’ reporting

Finance | Jonathan Last | 27 Jul 2012

CFG has responded to the Charity Commission’s information consultation strategy with a call to abolish the summary information return (SIR), which it has labelled "onerous and unnecessary".

Any charity with an income over £1m is required to submit the SIR as part of their Annual Return.

Jane Tully, head of policy and public affairs at CFG, said that the SIR represents a clear example of unnecessary duplication of reporting. “The information in the SIR is already available through the charity’s annual report,” she said. 

“We don’t believe that it is used to the extent that justifies the time it takes for finance teams to complete it accurately. Its purpose has long been questioned, most recently in Lord Hodgson’s comprehensive review of the Charities Act, and the current consultation offers a timely opportunity to abolish it.”  

Tully recognises that being able to extract data on charities quickly and easily is important, but suggests an alternative methodology.

“We believe the Commission should place more emphasis on encouraging charities to set out information in their reports that is clear, simple, easy to understand and that explores the charity’s impact,” she said.

“Technology also presents possibilities for opening up information that is submitted electronically; this would bring huge benefits without placing the burden on charities.”

Tully added that the Commission should retain thresholds relating to requirements for registration and submission of accounts, annual returns and audit, but allow easier access to voluntary registration for organisations with an income of below £5,000 that wish to register with the sector regulator.

No suspension of gift aid for late filing

CFG is “strongly against” the Commission’s proposition that late filers should be immediately suspended from accessing gift aid. “This would be a very strong punishment if put into effect automatically after one instance of late filing and would disproportionately affect small organisations or those struggling for resources,” Tully said.

The group also recommends that the Commission should explore developments such as iXBRL through discussion with the sector as well as Companies House and HMRC. 

“Computer–readable data formats have the potential to streamline the reporting and regulatory processes, support development of a single point of filing, as well as to open up better quality information and basic analyses to a wider audience,” Tully said.

CFG is further encouraging the sector regulator to work with HMRC, in order to develop systems of joint registration, and believes that all charities registered with HMRC should be required to register and file accounts with the Commission, with no exceptions.

Finally, CFG would also like to see historic information that gives wider context around individual charities and the sector as a whole included on the Commission’s register.  For example, whether an organisation exists as a result of merger or conversion from another legal structure.               
                                                         

Directory: Charity Finance Group | HM Revenue & Customs (HMRC)
Who's Who: Jane Tully