CHARITY ACCOUNTING REGULATIONS FOR SCOTLAND

The Charities Accounts (Scotland) Regulations 2006 apply to accounting periods beginning on or after 1 April 2006.

Here are the key changes:

Receipts and Payments (R&P) Accounts

• the upper limit for R&P accounts rises from £25,000 to £100,000 annual income
• R&P accounts must distinguish different types of funds
• the categories under which receipts and payments are broken down have moved closer to SORP principles
• R&P accounts must be accompanied by an Annual Report which covers 12 listed points

Accruals Accounts (‘Fully Accrued Accounts’)

• all charities with annual income over £100,000 must prepare accruals accounts
• the regulations refer to SORP in respect of Accruals Accounts in such a way that SORP now has force of law in Scotland

Submission of Accounts

• charities must submit accounts to OSCR within 9 months of their year-end (not 10 months)

Independent Examination

• the upper limit for IE rises from £100,000 to £500,000
• [the entry point remains at income of £1]
• if a charity is in the IE income range but has assets of £2.8m or more, then the charity must have an audit
• the Independent Examiner for all Accruals Accounts (those charities with income over £100,000 - or below if constitutionally or legally required - or if the trustees so choose) must be professionally qualified, including Full Members of ACIE
• the reporting duties of an IE are now the same as for England and Wales, ie, are framed in negative terms (‘no matter has come to my attention ...’)
• there is as yet no equivalent to CC63 for Scotland, but there are plans for guidance to be offered via OSCR or other agencies
• it is anticipated that IE will be available to 95% of Scottish charities (and that 85% of all Scottish Charities will be below £100,000)

Scottish Charitable Incorporated Organisations (SCIO’s)

• it is unlikely that SCIO’s will become an option before 2007 at the earliest - further information from OSCR (see below) - search ‘scio’ on their website

Charitable Companies

• because the regulations apply to all charities which are regulated by OSCR, whatever their legal form, then the regulations also apply to charitable companies
• this means that, unlike the rest of the UK at present charitable companies with annual income under £90,000 have to have an IE (or a Reporting Accountant’s report if they prefer)
• given that the accounts of a charitable company have to be completed on an accruals basis whatever their income, then their IE has to be carried out by a professionally qualified examiner (see above)
• an audit is again required if assets total £2.8m or more

OSCR - the Office of the Scottish Charities Regulator

OSCR’s duties are as follows:

• to determine charitable status
• to maintain a public register of charities
• to encourage, facilitate and monitor compliance
• to identify and investigate misconduct - and take action where necessary
• to provide information and advice to the charitable sector

OSCR’s contact details:
2nd Floor, Quadrant House
9 Riverside Drive
Dundee DD1 4NY

Telephone: 01382-220446 (Mon-Fri, 8.30 am to 4.00 pm)
www.oscr.org.uk
info@oscr.org.uk

English/Welsh charities working in Scotland

• if English or Welsh charities have premises or land; or hold open meetings or charge for events in Scotland, they will probably need to register with OSCR
• this will include submitting accounts and, whilst the same accounts should normally be able to be used for both OSCR and the Charity Commission (as per a memorandum of agreement between the two bodies) - if there are differences, eg, the 9 or 10 months period for submitting accounts, then the stricter rules will apply