Independent Examination of Accounts

Image result for independent examination of accountsCharity law requires those charities with a gross income of more than £25,000 to have some form of external scrutiny of their accounts.

The role of the independent examiner is to provide an independent scrutiny of the accounts. The examiner plays a part in maintaining public trust and confidence in charities

This limited form of check (sometimes referred to as ‘negative assurance’) contrasts with an audit. The examiner is only required to confirm whether any material matters of concern have come to their attention, whilst an auditor is required to provide an opinion on whether a charity’s accounts give a ‘true and fair view’.

An auditor builds up a body of evidence to support a positive statement as to whether the accounts give a ‘true and fair view’. An audit is carried out in accordance with international auditing standards and the audit guidance issued by the Financial Reporting Council.

An Independent Examination is therefore a limited form of scrutiny compared to an audit. It provides less assurance in terms of the depth of work which is to be carried out and is limited as to the matters on which the examiner reports.

An Independent Examination involves a review of the accounting records kept by the charity and a comparison of the accounts presented with those records. It also involves a review of the accounts and the consideration of any unusual items and/or disclosures provided. The examiner must also consider whether any matters of concern have come to the examiner’s attention as a result of the independent examination that should be included in their report to enable a proper understanding of the accounts to be reached.

The trustees may opt for an independent examination provided an audit is not required by charity law.  The charity must have an audit for financial years ending on or after 31 March 2015 if either its gross income exceeds £1m or, its gross income exceeds £250,000 and the aggregate value of assets (before deduction of liabilities) exceeds £3.26 million.

Charity Annual Return

If your registered charity’s financial year ended on 31 March 2018, then the deadline for submitting the charity’s accounts/ annual return to the Charity Commissionis 31 January 2019.

The Charity Commission has produced guidance on how to prepare an annual return. You can find that here

New questions in the 2018 annual returnFor the annual return 2018/2019, you need to be aware that there will be new questions to answer.  You can find more information about that here

If you need any further advice, then you can contact our office  here

Eligibility for Employment Allowance

TaxYou can claim Employment Allowance if you’re a business or charity (including community amateur sports clubs) paying employers’ Class 1 National Insurance.

You can also claim if you employ a care or support worker.

If you have more than one employer PAYE reference, you can only claim Employment Allowance against one of them.

If you’re part of a group, only one company or charity in the group can claim the allowance.

You can’t claim if:

  • you’re the director and the only employee paid above the Secondary Threshold
  • you employ someone for personal, household or domestic work (like a nanny or gardener) – unless they’re a care or support worker
  • you’re a public body or business doing more than half your work in the public sector (such as local councils and NHS services) – unless you’re a charity
  • you’re a service company working under ‘IR35 rules’ and your only income is the earnings of the intermediary (such as your personal service company, limited company or partnership)

Further detailed guidance can be found here