Charity commission’s pandemic flexibility being reined in as covid restrictions are eased

Kyle Smith

Charities which were given more time to file their accounts are facing an important deadline at the end of this month, says Kyle Smith of Lovewell Blake.

Charities which were granted extra time to file their annual reports and accounts because of the Covid crisis only have until the end of this month to do so, or seek a further extension – with the Charity Commission warning that failure to do so will result in charities being in serious breach of their responsibilities.

In March 2020, the Commission announced that it would consider granting extensions to charities which were struggling to meet their filing deadlines due to the pandemic.  But now that Covid restrictions have been relaxed, the regulator is expecting charities to meet a 30th September deadline.

Any charity which was granted a filing extension before 30th June 2021 only has until the end of this month to submit their annual return, reports and accounts.

However, the Commission has indicated that it is prepared to grant a fixed three month extension to charities with an imminent filing date, provided that the charity is otherwise compliant.

While it is warning that non-compliance can lead to reputational damage and damage charities’ ability to raise funds from trusts and foundations in particular, the Charity Commission is continuing to offer help and support to enable charities to comply – a classic ‘carrot and stick’ approach’.

Among the help available is an annual return service for charities, along with updated guidance on charity meetings and insolvency provisions to help charitable companies and charitable incorporated organisations (CIOs).

Included in this is advice on how to deal with restrictions on the ability of trustees to meet in person, and provisions to temporarily suspend the use of statutory demands and restrict winding-up petitions, where a charitable company or CIO is unable to pay bills due to the pandemic.

To be fair, the Charity Commission has been flexible and supportive in their attitude to regulation during the Covid crisis, but this flexibility cannot be expected to last forever.  So trustees need to be ensuring that any extended deadlines for filing are met, or, where appropriate, seeking an extension before the filing deadline.

The Charity Commission has a process for investigating non-compliance when it comes to filing, with the ultimate sanction being an inquiry into the charity trustees’ mismanagement and misconduct.  As well as stress and potential personal issues for trustees, such an inquiry can be very damaging to a charity’s reputation – which in these difficult times is a precious asset which should be protected at all costs.

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