The Charities Commission ran a consultation throughout the autumn of 2017 about the charities Annual Return for 2018 (AR2018). As a result, a number of amendments to the content of the annual return for 2018 have been announced.

In general, it is expected that AR18 will make for an easier user experience for charities, and the Charities Commission stresses that it will be more proportionate than in the past, with many charities required to answer fewer questions, and only those with large or complex operations being required to provide more information.

However, the new questions being introduced on the AR18 may create additional work for some charities. In recognising this additional burden on charities, the Commission have made some questions voluntary this year to give Charities time to put in place the systems to collect the information more easily, requiring less effort in future years.


Income from outside the UK

One of the questions Charities will need to answer is about the breakdown of sources of income from each country the charity receives funds from. The options to choose from are:

  • overseas governments
  • overseas charities
  • other overseas institutions
  • individual donors resident overseas
  • unknown

Charities may need to make changes to their financial systems to collect and sort the information required more easily. Parts of the question set relating to other private institutions outside the UK (other than charities, Non-Governmental Organisations and Non-Profit Organisations) and individual donors outside the UK, will be voluntary for annual return 2018. However, these questions will be mandatory from 2019 onwards and so Charities should ensure that their financial systems are able to collect the information.

Overseas expenditure

Some charities will also need to make changes to their record keeping to answer parts of the question to establish how charities transfer and monitor funds sent overseas.

For this reason the questions about methods of transferring money outside the regulated banking system, and about monitoring controls and risk management, will be voluntary for annual return 2018. These questions will be mandatory for the annual return 2019 onwards.

Salary and benefits in charities

AR18 will ask for a breakdown of salaries across income bands, and the amount of total employee benefits for the highest paid member of staff. However, details of benefits given to the paid member of staff will not be published on the public register.

The annual return must be completed by charities with annual incomes of £10,000 or above. AR18 applies to charities with financial years ending from 1 January 2018. Charities have 10 months from the end of their financial year to complete the return.


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