The government is reviewing the financial thresholds for charities in England and Wales, aiming to ensure appropriate regulation while reducing unnecessary burdens, especially for smaller charities. These thresholds determine aspects such as registration, accounting requirements, and the need for independent examination or auditing.
Background and Purpose:
Charity law regulates organisations based on size, with larger charities facing more stringent requirements due to their greater handling of public money. Smaller charities, however, are less resource-intensive and face lower regulatory costs. The Law Commission’s 2017 report recommended periodic reviews of these thresholds, adjusting for inflation every ten years. This consultation seeks input from charities and experts to ensure these thresholds remain proportionate and effective.
Key Areas of the Consultation:
- Registration, Reporting, and Accounting: The thresholds govern when charities must register, report, or submit accounts for independent examination or audit.
- Fundraising and Regulation: Charities involved in fundraising or other regulated activities are also subject to these thresholds.
Not for Profit
Read more about Not for ProfitRead more- Financial Threshold Adjustments: The government is considering inflation-adjusted increases to these thresholds, aiming to alleviate the regulatory burden on small charities.
- Impact of Changes: Changes will be considered based on factors such as alignment with other laws (e.g., company law), the practical implications for the Charity Commission, and the impact on transparency and data quality.
Inflation and Data:
Inflation calculations are based on the Consumer Price Index with Housing (CPIH). Thresholds will be rounded to specific amounts based on their value, ensuring adjustments are manageable and practical.
Key Principles for the Review:
- Alignment with other laws to maintain consistency across charity and company laws.
- Practical impacts on charities, especially smaller ones.
- Ensuring transparency and accountability in the sector’s data, which the Charity Commission uses for oversight.
- Avoiding unnecessary regulatory changes that could burden charities without significant benefits.
