Preparing UK charity accounts involves navigating a detailed regulatory framework, yet several key requirements are frequently overlooked. Here we look at a few items that are needed as a useful reminder:
Termination payments
One of the most common gaps relates to “termination payments” - that is those payments connected with staff leaving employment of the organisation. Charities must disclose not only the amounts paid to departing staff but also the nature of the payments and the decision‑making process behind them. While everyone appreciates that this can be a sensitive area, missing or incomplete disclosures can lead to questions about governance and transparency.
Related-party transactions
Related‑party transactions are another area where disclosures can be overlooked. Trustees, senior staff, and organisations connected to them are among those that fall within the related‑party definition. The definitions are wider than you might think and very specific as laid out in chapter 9 of the charity Statement of Recommended Practice or “SORP”. Charities must disclose the relationship, the transaction value, and whether it was undertaken at arm’s length.
Even when no transactions occur, a statement confirming this is required - something that charities can sometimes forget to include.
Risks
In the Trustees’ Report (and you can read our guidance blog with top tips for the Trustees' Report for further help), the required description of principal risks and uncertainties is frequently lacking detail. Many charities provide generic statements rather than specific, charity‑relevant risks. Equally important is the need to explain the steps taken to mitigate those risks. Regulators expect clear, tailored commentary that demonstrates active risk management and mitigation by the charity, not boilerplate text.
Going concern
Finally, the going concern assessment is often treated too lightly. Trustees must explain the basis for concluding that the charity remains a going concern, taking account of cash flow forecasts, reserves, and external pressures. Especially in the volatile economic times that the sector is currently facing, a robust, transparent narrative is essential and what readers of the financial statements are seeking assurance from.
Get help if needed
We recommend all our clients engage early with us if they have any concerns about what should be disclosed in the financial statements, especially if they relate to more sensitive matters. Agreeing these in advance ensures a smoother “no surprises” annual accounts and independent examination process, and allows the timetable to be worked towards more efficiently.