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Charity Commission considers fine for late accounts

Charity Commission considers fine for late accounts
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Charity Commission considers fine for late accounts 1

Finance | Jonathan Last | 28 May 2012

The Charity Commission is to ask charities for their views on fines for the late filing of accounts, its chief executive Sam Younger revealed at a public meeting last week.

Younger, delivering the first presentation at the Birmingham-based meeting, reviewed the Commission’s strategic plan for 2012-15 and spoke of developing accountability in the voluntary sector, which he said was of “mutual interest” to the regulator and charities alike.

As well as outlining the Commission’s current accountability goals – pushing charities to file online and on time; promoting transparency; encouraging charities to announce when they have dissolved – Younger told of an upcoming consultation reviewing the information it currently asks from trustees. Amongst the range of questions will be “Should we fine charities that file late?” he said.

“The only sanction we’ve currently got [for this] is the red flag on the register,” said Younger. “So should there be more – or should we in fact provide incentives to charities that file early?”

It transpired last week that the Charity Commission is considering the administrative benefits of working with Companies House, in terms of accepting the same sets of accounts and common annual returns, and will consult the sector on the proposals during the summer. Such a move has been recommended by Lord Hodgson, who is reviewing the Charities Act 2006.

Companies House has its own policies in place for fining following the late filing of accounts, ranging from £150 for private companies and £750 for public companies which are one month late, to as much as £1,500 and £7,500 respectively if the accounts are more than six months overdue.

Younger did not reveal if the Commission had considered the details of any proposed fines – or, indeed, rewards.

James Hickey
Management Consultant
Charlton Associates
5 Jun 2012

I think that the more important proposal is for requiring only one set of accounts for incorporated charities. If Companies House can agree to accepting charity accounts then the issue of fining becomes less relevant as it is standard practice in the rest of the business world.

Charity accounts are a vital part of the sector's commitment to openness and transparency. Failing to produce adequate accounts on time is too prevalent for comfort in my opinion.

As a former Chair of a charity and as a consultant working in the sector I would support both moves.

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