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our guide to the new charity accounting regulations

By Kevin Russell | 9 December 2014

Image by genbug on Flickr, used under Creative Commons

The Charity Commission (and OSCR, in relation to Scotland) recently published two new accounting regulations that will apply to charities. The new rules (in the form of Statements of Recommended Practice, or SORPs) apply for accounting years beginning on or after 1 January 2015 which in practice, means that comparative figures for the prior year also need to be prepared on the same basis.


In a departure from previous incarnations, the authorities have this time published two alternative SORPs. It is for charity trustees to decide which one will apply to their own charity.


Our recently published Briefing Note 2014/1 Charity Accounting – forthcoming changes provides guidance to the SORPs, tailored to the needs of churches and Christian charities and is available here.


Although styled as ‘Recommended Practice’ the requirements of SORP are underpinned in law by the Charities (Accounts and Reports) Regulations 2008 and therefore have statutory force for charities preparing accruals accounts. All charitable companies must prepare accruals accounts. In England, Wales and Scotland, unincorporated charities and CIO’s are only required to prepare accruals accounts if their gross income in the year exceeds £250,000.


In Northern Ireland, where the Charity Commission for Northern Ireland (‘CCNI’) is in its infancy, different, interim rules apply. Until the beginning of 2015, when new accounting and reporting regulations are expected to come into force, charities in NI can submit their accounts to CCNI in the format that they currently prepare them.


It is expected that the new regulations will require compliance with the new SORPs. Charity trustees can visit in order to produce an online version of SORP tailored to their charity’s circumstances.


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Posted by Kevin Russell

Our Legal Eagle guru and Stewardship's Technical Director, Kevin constantly has his finger on the pulse of all things tax and charity law-related. His briefing papers for charities, churches and individuals are an invaluable resource on everything from VAT to Gift Aid. 


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