Charity Accounts

Useful Documents


All charities must maintain accounting records and prepare accounts. Registered charities must also prepare a trustees annual report to accompany their accounts depending on the level of income.  Where these documents are required to be submitted to the commission, this must be done within 10 months of the end of the accounting year to which they refer. The commission would encourage charities to file well before the deadline in case an issues are encountered.


There are two different methods which you can use as a charity. It does depend on the size of your charity as once you reach a certain limit you must use only the accruals basis.


This is the simpler of the two methods of preparation and may be adopted where a non-company charity has a gross income of £250,000 or less during the year. It consists of an account summarizing all money received and paid out by the charity in the financial year, and a statement giving details of its assets and liabilities at the end of the year. Charitable companies are not allowed by company law to adopt this method.


Non-company charities with gross income of over £250,000 during the financial year, and all charitable companies must prepare their accounts on the accruals basis in accordance with the applicable Statement of Recommended Practice (SORP). The SORP to follow will depend upon the charity’s financial year. They contain a balance sheet, a statement of financial activities and explanatory notes. These accounts are required in accountancy terms to show a ‘true and fair view’.

Trustees annual report 

The basic contents of the trustees annual report are mandatory. However, smaller charities which are not subject to statutory audit are not required to provide as much information as larger charities which are legally required to have an audit. The legal requirements are set out in section 7 of the "Charity Reporting and Accounting - The Essentials" guidance (you can find a copy at the bottom of this page). That section is divided between matters which all charities must report, matters that smaller charities report, and matters that larger charities report. The SORP also provides best practice recommendations for annual reporting that are consistent with the legal framework. 

The trustees annual report is an important milestone in a charity’s life, a chance to take stock of how the year compared to the trustees plans and aspirations, a time to celebrate successes and achievements, and to reflect on difficulties and challenges. The trustees annual report is also an opportunity to highlight the main activities or significant activities undertaken in order to carry out the charity’s purposes for the public benefit. The report’s audience is not just trustees and members, funders, donors and beneficiaries, but also the wider public who have an interest in what charities do and what they achieve. 

The trustees annual report need not be lengthy. A good trustees report explains the charity’s aims and how it is going about achieving them. It meets all the legal requirements and provides a balanced view of the charity’s structure, objectives, activities and performance. Importantly, it brings the charity to life and for those charities that rely on voluntary income as their primary source of funding provides donors with the opportunity to understand how their money was spent and the difference it has made.

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