Do All Charities Need to File Annual Accounts

Charities exist to serve the public good, and with that comes a duty to handle funds responsibly and transparently. One area that causes confusion for new trustees and community groups is annual reporting. Do all charities need to file annual accounts, and what exactly must be filed. The short answer is yes. All charities have annual accounting duties but the level of reporting varies depending on the charity’s income, structure and whether it is registered with the Charity Commission.

This article breaks the topic down clearly. You will learn how the rules differ for small charities, registered charities, Charitable Incorporated Organisations (CIOs) and exempt or excepted charities. You will also learn what accounts must include, when deadlines apply and what happens if a charity does not file. For anyone responsible for governance this guide provides practical clarity.

Understanding Charity Accounting in the UK

The Charities Act 2011 places clear responsibilities on charities about how they manage and report their finances. Every charity, whether registered or not, must:

• keep proper accounting records

• prepare annual accounts

• maintain governance documents

• ensure accountability to the public

These rules exist to maintain public trust. They apply whether the organisation is a small community group, a large national charity or a faith based organisation.

What changes is who files what and where.

Do All Charities Have to Prepare Annual Accounts

Yes. All charities in England and Wales must prepare annual accounts, even if they are not required to register with the Charity Commission.

This includes:

• registered charities

• small charities earning under £5,000

• charitable trusts

• charitable companies

• CIOs

• churches and faith groups

• community groups that meet the legal definition of a charity

The accounts must follow rules based on:

• income level

• charity structure

• whether the charity is registered

Preparation is mandatory but filing depends on the category.

Do All Charities Have to File Their Accounts with the Charity Commission

No. Only registered charities must file their accounts. Small unregistered charities must still prepare accounts but are not required to submit them unless requested.

Charities that must file their accounts:

• Registered charities with income over £5,000

• Charitable Incorporated Organisations (CIOs) regardless of income

• Charitable companies (limited companies that are also charities), which must file with both Companies House and sometimes the Charity Commission

Charities that do not file annual accounts with the Charity Commission:

• Small charities earning under £5,000 that are not registered

• Excepted charities (such as some religious bodies) unless specifically requested

• Exempt charities regulated by another body

Even when a charity does not file accounts, it must still prepare them every year and keep them available for inspection.

Accounting Rules by Charity Type

Understanding how reporting differs helps trustees stay compliant.

1. Registered Charities (Income over £5,000)

These charities must file:

• annual accounts

• trustees’ annual report

• annual return

The type of accounts depends on income:

Income under £250,000

• Receipts and payments accounts (if not a charitable company)

• Trustees’ annual report

• Independent examination unless income is under £25,000

Income £250,000 to £1 million

• Accruals accounts following the Charities SORP

• Trustees’ annual report

• Independent examination

Income over £1 million

• Full audit required instead of independent examination

• Accruals accounts following the Charities SORP

• Trustees’ annual report

Registered charities must file within 10 months of year end.

2. Charitable Incorporated Organisations (CIOs)

CIOs must file every year regardless of income.

They must submit:

• annual accounts

• trustees’ report

• annual return

Even if a CIO has £0 income it must file accounts.

CIO accounts must always use the accruals method unless income is below £250,000, where receipts and payments is allowed.

3. Charitable Companies (Companies Limited by Guarantee)

These charities have two sets of obligations.

They must file:

To Companies House:

• statutory annual accounts

• directors’ report

• confirmation statement

To the Charity Commission:

• annual accounts and trustees’ report if income exceeds £10,000

• annual return

Accounting rules follow company law and the Charities SORP.

4. Small Unregistered Charities (Income under £5,000)

These charities:

• do not register with the Charity Commission

• do not file accounts with the Commission

• must still prepare accounts and keep them

If they own property or handle significant funds, trustees are expected to follow good governance even without filing.

5. Excepted Charities

Some charities do not need to register if they meet excepted criteria. These include:

• certain Church of England parishes

• some Methodist churches

• some Scout and Guide groups

• some Armed Forces charities

Although they may not file accounts, they must:

• prepare annual accounts

• make them available to the public on request

• comply with charity law

The Charity Commission can still ask for accounts at any time.

6. Exempt Charities

Exempt charities are regulated by another body. Examples include:

• academies

• universities

• some museums

• some housing associations

These charities do not file with the Charity Commission but must follow the accounting rules set by their regulator.

What Must Charity Accounts Include

The exact content depends on the size and structure, but most charities must prepare:

1. A statement of receipts and payments or accruals accounts

Receipts and payments is a simple cash based method used by smaller charities.
Accruals accounts follow the Charities SORP and show a more detailed financial position.

2. Trustees’ annual report

This explains:

• the purpose of the charity

• activities during the year

• achievements

• financial performance

• plans for the next year

• how the charity provides public benefit

3. Notes to the accounts

These give details of income, expenditure, reserves, risks and related party payments.

4. External scrutiny report

Depending on income, accounts must be:

• independently examined

• or audited

This external review adds public confidence.

When the Accounts Must Be Filed

The deadline depends on the charity type.

Registered charities

Must file within 10 months of their financial year end.

CIOs

Same rule: 10 months.

Charitable companies

File with Companies House within 9 months of year end
File with the Charity Commission within 10 months.

Small unregistered charities

No filing deadline because they do not submit accounts, but they must prepare them annually and keep them stored.

What Happens if a Charity Fails to File Accounts

The Charity Commission monitors compliance closely. Missing deadlines can result in:

• public display of “late filing” status on the Commission register

• loss of public trust

• reduced grant eligibility

• administrative intervention

• investigations into governance

• removal of trustees in extreme cases

For charitable companies, Companies House may also:

• impose penalties

• strike the charity off the register

Poor filing records can make the public, funders and banks reluctant to work with the charity.

Why Annual Accounts Matter

Filing accounts is not just an administrative requirement. It builds credibility and safeguards the charity’s future.

Transparency

Donors want to know how money is managed. Public accounts create trust.

Accountability

Trustees are responsible for ensuring funds are used correctly. Accounts are the evidence.

Better management

Accounts help identify:

• cashflow issues

• overspending

• underfunding

• financial risks

Funding eligibility

Most funders require up to date accounts. Without them grant applications fail.

Legal compliance

Filing accounts protects trustees from accusations of mismanagement.

Do Very Small Charities Need an Accountant

Small charities do not have to use an accountant but many choose to because:

• external scrutiny rules may require an independent examiner

• funding bodies may expect professionally prepared accounts

• trustees often lack confidence with accounting rules

• accruals accounts can be complex

For charities approaching £25,000 income independent examination becomes mandatory.

In my opinion even small charities benefit from accounting support, especially when volunteer turnover is high.

Real World Examples

Example 1: A community group under £5,000

A small volunteer led group runs events and raises £3,000 a year. It must prepare accounts but does not file with the Charity Commission.

Example 2: A church earning £15,000

This church must register as a charity and must file its annual accounts and trustees’ report within 10 months.

Example 3: A CIO with £1,000 income

Even though income is low, the CIO must file accounts every year because CIO filing rules apply regardless of income.

Example 4: A charitable company earning £120,000

It must file full statutory accounts with Companies House and also file accounts with the Charity Commission.

Example 5: A Scout group excepted from registration

It does not file accounts but must produce them and provide them if asked by the Charity Commission.

Checklist: Does My Charity Need to File Accounts

Use this quick reference:

If your charity is registered
Yes, you must file.

If your charity is a CIO
Yes, you must file.

If your charity is a charitable company
Yes, you file with Companies House and sometimes the Charity Commission.

If your charity earns under £5,000 and is unregistered
You prepare accounts but do not file.

If your charity is excepted
You prepare accounts but do not file unless asked.

If your charity is exempt
You report to your exempt regulator not the Charity Commission.

Conclusion

All charities in England and Wales must prepare annual accounts. Whether they must file those accounts depends on their structure and income. Registered charities, CIOs and charitable companies must file every year. Small unregistered charities, excepted charities and exempt charities must still prepare accounts but do not normally file them unless requested.

Understanding these rules helps trustees stay compliant, build trust with supporters and demonstrate responsible stewardship. Annual accounts are more than a legal requirement. They are an essential part of good governance and a foundation for long term success.