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Charities Act 2006 1st Commencment Order

Audit thresholds increased for ac periods commencing 27/02/07

Note that different rules apply in Scotland and Northern Ireland. The law should be checked for those jurisdictions.

The first commencement order has been made increasing the audit threshold in England & Wales for charities from gross income of 250,000 to 500,000.

A new asset test requirement has also been introduced. Any charity with gross assets exceeding 2.8 million will require an audit, regardless of income levels.

This will affect all charities whose accounting periods commence on 27th February 2007, so in practical terms will come into effect in early 2008

There is a temporary arrangement for incorporated charities whose income is above 250,000 and below 500,000, whose accounting periods commence on or after 27th February 2007. These charities are temporarily subject to the existing reporting accountant's reports that formally applied up to 250,000. However, when the Companies Act 2006 provisions are commenced (probably in Autumn 2007), these provisions will be replaced.

The Companies Act 2006 abolishes reporting accountant's reports for incorporated charities with income between 90,000 and 250,000 and replaces that procedure with an independent examination, and that will then apply in future.

That will then mean that independent examinations apply to all charities in England & Wales, whether incorporated or unicorporated if their gross income exceeds 10,000 per annum.

Other aspects of the Act that have been commenced by the order include the fact that accounts and the annual report must be supplied upon payment of a reasonable fee to anybody requesting them. The new provisions introducing a daily default fine for late filing of an annual return are also now in force

Details of the commencement order can be found on the web at

http://www.cabinetoffice.gov.uk/third_sector/law_and_regulation/charities_act_2006/implementation.asp

 

 
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