What type of accounts do charitable companies have to submit to OSCR?
There are several different legal forms a charity can take in Scotland, and each type of charity has different requirements and responsibilities. It’s important to know what is required of your type of charity so you can submit the right documents when it’s time for your annual return.
A charitable company is one such legal form. Recently, we have seen a number of cases where charitable companies have submitted the wrong format of accounts to us and so we thought it would be a good time to remind charity trustees, and those working with charitable companies, of what the requirements are.
What are the legal requirements?
All charities registered in Scotland have a legal duty to provide us with annual reports and accounts every year. This is one of the charity trustee duties set out in The Charities and Trustee Investment (Scotland) Act 2005.
As charitable companies have dual regulators, OSCR and Companies House, it’s necessary to submit accounting information to both regulators. Charitable companies must meet the accounting requirements of both the Companies Act 2006 and the Charities Accounts (Scotland) Regulations 2006 (as amended).
What type of accounts are required?
Charitable companies must prepare a set of fully accrued accounts. These accounts must be prepared in line with the requirements of the Charities SORP (FRS 102).This sets the framework for charity financial reporting in the UK for any charity preparing fully accrued accounts.
Under the 2006 Regulations, the statement of account for fully accrued accounts must consist of:
- A statement of financial activities (often referred to as the SOFA)
- A balance sheet
- A statement of cash flows, if appropriate
- Notes to the accounts
- A Trustees’ Annual Report
The statement of account must then be either independently examined or audited.
A copy of the full statement of account must be submitted both to Companies House and to us, along with the independent examiners or auditors report.
A reminder of what not to submit
Charitable companies are not eligible to opt into the micro-entity regime. They are specifically excluded from it under the legislation which introduced the regime, The Small Companies (Micro-Entities' Accounts) Regulations 2013.
In addition the legislation which introduced abridged accounts, The Companies, Partnership and Groups (Accounts and Reports) Regulations 2015, also specifically excludes charitable companies. So, abridged accounts are also not an option for charitable companies.
For more information, please see our charity accounting guidance and advice on submitting fully accrued accounts.