[WiLT] Fw: (Cab Office) Red tape cut for small charities

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Subject: (Cab Office) Red tape cut for small charities



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31/03/2009 16:42

Cabinet Office (National)

(Cab Office) Red tape cut for small charities

Thousands of small charities will save up to £5million a year as the
Government cuts red tape by raising the income thresholds above which
stricter accounting rules apply.

>From 1 April the Government is giving charities more freedom to
dedicate their time and money to making a difference rather than
paperwork. The changes will make the regulations more proportionate to
the risks so that donors can be confident that charities are
accountable while more of their money will end up directly helping the
charitable cause.

Kevin Brennan, Minister for the Third Sector, said:

"This means more money can get to where it's really needed. These
changes will particularly help small charities that are playing a
vital role in communities suffering the impact of economic downturn.
The Government has a £42million package of recession support for
charities and will continue to make important changes such as these to
help them thrive."

Andrew Hind, Chief Executive of the Charity Commission said,

"Today's welcome changes to financial thresholds should make a
material difference to nearly 50,000 charities as they report on their
finances and activities - striking an important balance between
proportionality and accountability."

Key income threshold changes, coming into force from 1 April include:

* Raising the threshold above which charities prepare accruals
accounts from £100,000 to £250,000 - around 11,700 in this category
will benefit.

* Raising the threshold above which accounts must undergo external
scrutiny from £10,000 to £25,000 - benefiting around 37,000 charities.

* Increasing in the threshold above which charities submit annual
accounts and Trustees Annual Reports to the Charity Commission from
£10,000 to £25,000 - this will benefit around 23,000 small charities.

Ron Norey of the Association of Church Accountants and Treasurers,
said:

"The Association of Church Accountants and Treasurers warmly welcomes
the increase in the Accruals threshold from £100,000 to £250,000.
Church treasurers are generally ordinary church member volunteers, and
though they must have basic skills in simple book-keeping and
accounts, many are less able to prepare the more demanding statements
obligatory in the Accruals basis.

"The level of expertise they perceive to be required deters church
members from volunteering to be treasurer. Extending the base for the
less demanding Receipts and Payments basis should also provide a
considerable boost to the recruitment of  new and successor candidates
to fill the post."

Wendy Dacey, Village Halls Adviser for the Community Council for
Berkshire said:

"I am delighted that the threshold at which charities need to have
their accounts externally examined, is to rise from £10,000 to £25,000
from 1 April 2009. Many village halls are charities, run by
volunteers, but as public buildings have many rules and regulations
which they have to comply with.

 "Village hall committees have sometimes had to pay someone to examine
the accounts so this will result in cost saving and is particularly
important when halls had exceeded the £10,000 threshold because they
had received a grant to carry out improvements in the halls. This
ring-fenced money sometimes meant that halls then incurred a cost
which would not otherwise have come about."

All charities, including those with annual incomes under £25,000 must
prepare accounts and make them available on request. The changes to
accounting thresholds followed a consultation held jointly by the
Office of the Third Sector in the Cabinet Office and the Charity
Commission.

Notes to editors
1. The Order making the necessary amendments and an explanatory note
can be found at http://www.opsi.gov.uk/si/si200905 , under number 508.

2. Today's threshold changes are the result of a consultation on
financial thresholds mentioned in the Charities Act 2006. This
consultation was run jointly by the Office of the Third Sector and the
Charity Commission in 2008. The Government's response to the
consultation was published on 1 September 2008.

3. The Charity Commission is the independent regulator for charitable
activity in England and Wales. See http://www.charitycommission.gov.uk
for further information or call our contact centre on 0845 300 0218.

Cabinet Office Press Office
http://www.cabinetoffice.gov.uk

Client ref CAB023/09
COI ref 172484P

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