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Commission needs to 'toughen up' on late filing, says Younger

Governance | Niki May Young | 26 Sep 2012

Sam Younger will reveal a new harder line in tackling the "habitual problem" of late filing at the Charity Commission's annual public meeting in London today.

The regulator's chief executive will say that the Commission must "toughen up its message", as he reveals that 35 per cent of those accounts filed to the Commission late were signed before the charities' filing deadlines.

In a blog on the Charity Commission's website this morning Younger said that he had not expected recent profiling of late filers undertaken by the Commission's senior accountants to reveal anything in particular, but that he was "astonished" to find that over a third of those who filed late had prepared their accounts well in advance of deadline:

"They just hadn't been submitted to us. A case of signed, sealed - and then placed in a drawer while the charity's entry on the Register turned from green to red and the charity's potential donors were left in the dark about its finances and activities," he said.

On time to Companies House, late to Charity Commission

The research further revealed that 39 per cent of late filers that were also companies, managed to submit their accounts on time with Companies House, which issues fines for late submissions. Additionally, only 5 per cent prioritised filing accounts with the Charity Commission over Companies House.

"My suspicion is that Companies House system of fines is the crucial factor here," said Younger, who will provide further details to an audience expecting to hear how the Commission intends to boost public trust and confidence in charities this afternoon.

In his recent review of the Charities Act 2006 Lord Hodgson of Astley Abbotts suggested that charities filing their accounts late could receive financial penalties such as the inability to claim gift aid. 

But Younger advised that this system "couldn't be implemented overnight if it were accepted - it would require legislative change and a lot of planning as to the practicalities involved for us and HMRC".

Younger advised that the previous apprehension over introducing fines for fear of detracting from the amount that the charity can put towards its charitable aim is changed by the profiling results:

"Charities should take note that the 'benefit of doubt' balance is shifting: in the past, we were more cautious about discussions around penalties, as any fine a charity pays detracts from the sum it can put towards furthering its charitable aim.

"And perhaps, in the past, there might have been a nervousness about kicking a charity while it was down - assuming that late filing was linked to financial problems in a charity. But these new findings do not suggest late filers face greater financial hardship than the sector generally."

In 2011/12 around 14 per cent of charities provided their accounts to the Charity Commission after their filing deadline. In a recent independent survey into public trust and confidence in the charitable sector, 96 per cent of individuals responding  said it was important to them that charities provide the public with information about how they spend their money.

Follow the Charity Commission annual public meeting today on Twitter at #ccmtg

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Who's Who: Sam Younger