The Charities (Accounts and Reports) Regulations 2005

JurisdictionUK Non-devolved
CitationSI 2005/572

2005 No. 572

CHARITIES

The Charities (Accounts and Reports) Regulations 2005

Made 7th March 2005

Laid before Parliament 10th March 2005

Coming into force in accordance with article 1

The Secretary of State, in exercise of the powers conferred upon him by sections 42, 44, 45 and 86(3) of the Charities Act 19931and after such consultation as is mentioned in section 86(4) of that Act, hereby makes the following Regulations:

S-1 Citation and commencement

Citation and commencement

1.—(1) These Regulations may be cited as the Charities (Accounts and Reports) Regulations 2005 and, subject to paragraph (2), shall come into force on 31st March 2005.

(2) Paragraph 2(iii) of Part VI of Schedule 2 shall come into force on the date when section 1 of the Civil Partnership Act 20042comes into force in relation to England and Wales.

S-2 Interpretation

Interpretation

2. In these Regulations—

“auditable charity” means a charity the accounts of which for the financial year in question are required to be audited in pursuance of any statutory requirement;

“authorised person” has the same meaning as in the Financial Services and Markets Act 20003;

“charity trustee” includes, in relation to an investment fund, any person who discharges any of the functions of a charity trustee in relation to the investment fund;

“charity trustees” means, in relation to an investment fund, the person or persons appointed to manage the investment fund, except where the scheme or schemes regulating the investment fund allocate responsibility for discharging a particular function to a particular person or persons, when, in relation to that function, “the charity trustees” means that person or those persons;

“common deposit fund” means a common deposit fund established by a scheme under section 22A of the Charities Act 19604or section 25 of the 1993 Act (which is deemed to be a charity by virtue of section 24(8), as applied by section 25(2), of the 1993 Act);

“common investment fund” means a common investment fund established by a scheme under section 22 of the 1960 Act or section 24 of the 1993 Act (which is deemed to be a charity by virtue of section 24(8) of the 1993 Act), other than a common investment fund the trusts of which provide for property to be transferred to the investment fund only by or on behalf of a participating charity of which the charity trustees are the trustees appointed to manage the investment fund;

“director” includes any person occupying the position of a director, by whatever name called, and in relation to a body corporate whose affairs are managed by its members means a member of the body corporate;

“ex gratia payment” means any such application of the property of a charity, or any such waiver by a charity of any entitlement to receive any property, as is capable of being authorised under section 27(1) of the 1993 Act;

“financial year” shall be construed in accordance with regulation 6 below;

“fixed assets” means the assets of a charity which are intended for use or investment on a continuing basis;

“fund” means particular assets of a charity held on trusts which, as respects the purposes for which those assets are held, or as respects the powers of the charity trustees to use or apply those assets, are not identical to those on which other assets of the charity are held;

“institution or body corporate connected with the charity”, in relation to a charity, means an institution or body corporate which—

(a) in the case of an institution, is controlled by,

(b) in the case of a body corporate, in which a substantial interest is held by,

the charity or any one or more of the charity trustees acting in his or their capacity as such, and “substantial interest” shall be construed in accordance with paragraph 4 of Schedule 5 to the 1993 Act;

“investment fund” means a common deposit fund or a common investment fund;

“reserves” means those assets in the unrestricted fund of a charity which the charity trustees have, or can make, available to apply for all or any of its purposes, once they have provided for the liabilities of the unrestricted fund, together with any commitments of the charity and other planned expenditure intended to be met from the assets of the unrestricted fund;

“special case charity” means a charity which is either—

(a) a registered social landlord within the meaning of the Housing Act 19965and whose registration has been the subject of a notice under section 3(3)(a) of that Act; or

(b) has during the financial year in question—

(i) conducted an institution in relation to which a designation made, or having effect as if made, under section 129 of the Education Reform Act 19886has effect;

(ii) received financial support from funds administered by a higher education funding council within the meaning of the Further and Higher Education Act 19927in respect of expenditure incurred or to be incurred by the charity in connection with that institution; and

(iii) incurred no expenditure for charitable purposes other than the purposes of that institution or any other such institution;

the 1960 Act” means the Charities Act 1960;

the 1993 Act” means the Charities Act 1993;

“the 1995 Regulations” means the Charities (Accounts and Reports) Regulations 19958;

“the 2000 Regulations” means the Charities (Accounts and Reports) Regulations 20009;

“the SORP” means the Statement of Recommended Practice for Accounting and Reporting by Charities, issued by the Commissioners on 4th March 2005;

“trustee for a charity” means any person (other than the charity itself, or a charity trustee of the charity) who holds the title to property belonging to the charity, and so includes a custodian trustee and a nominee; and

“unrestricted fund” means a fund which is to be used or applied in any way determined by the charity trustees for the furtherance of the objects of a charity, and “restricted fund” means any other fund of a charity.

S-3 Form and contents of statements of accounts

Form and contents of statements of accounts

3.—(1) This regulation applies to a statement of accounts prepared by the charity trustees of a charity, other than an investment fund, or a special case charity, in accordance with section 42(1) of the 1993 Act in respect of a financial year—

(a)

(a) which begins on or after 1st April 2005; or

(b)

(b) which begins before that date if—

(i) the charity trustees determine that this regulation, rather than regulation 3 of the 2000 Regulations, shall apply to the statement of accounts; and

(ii) the charity trustees have not, before the date when these Regulations come into force, either approved the accounts of the charity in respect of that financial year, or authorised the signature of an annual report in respect of that financial year in accordance with regulation 7(3)(c) of the 2000 Regulations.

(2) If the charity trustees make a determination under sub-paragraph (b) above, they shall also make a determination under regulation 11(1)(b) below, if they are required to prepare an annual report in respect of the financial year in question.

(3) The requirements as to form and contents of a statement of accounts to which this regulation applies are those set out in the following provisions of this regulation.

(4) The statement shall consist of—

(a)

(a) a statement of financial activities which shall show the total incoming resources and application of the resources, together with any other movements in the total resources, of the charity during the financial year in respect of which the statement is prepared; and

(b)

(b) a balance sheet which shall show the state of affairs of the charity as at the end of the financial year in respect of which the statement is prepared.

(5) The statement shall be prepared in accordance with the following principles, namely that—

(a)

(a) the statement of financial activities shall give a true and fair view of the incoming resources and application of the resources of the charity in the financial year in respect of which the statement is prepared;

(b)

(b) the balance sheet shall give a true and fair view of the state of affairs of the charity at the end of that year;

(c)

(c) where compliance with the following requirements of this regulation would not be sufficient to give a true and fair view, the necessary additional information shall be given in the statement of accounts or in notes to the accounts;

(d)

(d) if in special circumstances compliance with any of those requirements would be inconsistent with giving a true and fair view, the charity trustees shall depart from the requirement to the extent necessary to give a true and fair view.

(6) The statement—

(a)

(a) shall be prepared in accordance with the methods and principles set out in the SORP; and

(b)

(b) subject to the following three paragraphs of this regulation, shall, with respect to any amount required to be shown in the statement of financial activities or in the balance sheet, also show the corresponding amount for the financial year immediately preceding that to which the statement or balance sheet relates.

(7) Where that corresponding amount is not comparable with the amount to be shown for the item in question in respect of the financial year to which the statement of financial activities or balance sheet relates, the former amount shall be adjusted.

(8) Where in the financial year to which the statement of accounts relates the effect of paragraph (5) and paragraph (6)(a) above is that there is nothing required to be shown in respect of a particular item, but an amount was required to be shown in respect of that item in the statement of accounts for the immediately preceding financial year, those provisions shall have effect as if such an amount were required to be shown in the statement of accounts in the financial year to which the statement relates, and that amount were nil.

(9) Where a charity has more than one fund, only amounts corresponding to the entries in the...

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