Accountancy aspects of Charities


Charities and the Voluntary Sector

R H Jeffs & Rowe have long-standing experience advising charities and not-for-profit organisations across a wide range of sectors. We work closely with Trustees, finance teams and senior management to ensure that charities meet their statutory, regulatory and reporting obligations, while maintaining clear and transparent financial reporting.

Our advice is practical, proportionate and grounded in a strong understanding of how charities operate in practice, including the challenges of governance, funding restrictions and regulatory scrutiny.

Our charity expertise

We act for charities of varying size and complexity, including charitable companies, CIOs and unincorporated trusts. Our work routinely encompasses compliance with:

  • The Charities Act 2011
  • The Companies Act 2006 (where applicable)
  • Financial Reporting Standards
  • The Charities SORP (2019), together with preparation for transition to the forthcoming Charities SORP 2026

Many of our charity clients fall within Tier 2, applying to charities with gross income between £500,000 and £15 million, and we are well-versed in the enhanced reporting and disclosure requirements that apply at this level.

Audit and Independent Examination

As Chartered Accountants and Registered Auditors, we provide both statutory audit and Independent Examination services to charities, depending on their size, structure and regulatory requirements.

Independent Examination

Independent Examination is less onerous than an audit and is often a cost-effective alternative for smaller charities.

From 30 September 2026, proposed changes include:

  • Independent Examination threshold increasing to income over £40,000
  • Requirement for a qualified examiner increasing to income over £500,000
  • Statutory audit threshold increasing to income over £1.5 million or assets over £5 million

We advise Trustees on the most appropriate form of external scrutiny and ensure that the work undertaken fully meets Charity Commission expectations.

Statutory audit

Where an audit is required, we act as independent auditors in accordance with UK auditing standards and charity legislation. We regularly audit charities that are also subject to company law, operating within the dual framework of the Charities Act and the Companies Act.

Financial reporting and compliance

Charity accounts and Trustees’ Annual Reports are subject to specialist reporting requirements that differ significantly from those of commercial entities. We prepare statutory accounts fully compliant with the Charities Act and the Charities SORP, ensuring:

  • Proper presentation of restricted and unrestricted funds
  • Clear disclosure of governance arrangements and trustee responsibilities
  • Transparent reporting to funders, regulators and stakeholders

We place particular emphasis on clarity and readability, recognising that accounts are often relied upon by Trustees who are not financially trained.

Structure, tax and VAT

Registering as a charity does not automatically exempt an organisation from tax or VAT. Many charities undertake activities that may constitute trading, and VAT can be a complex area, particularly where partial exemption applies.

We advise charities on:

  • The most appropriate legal and operating structure, including charitable companies, CIOs and trading subsidiaries
  • Establishing and operating trading subsidiaries to protect charitable status and optimise tax efficiency
  • Corporation tax, VAT registration and partial exemption calculations
  • Gift Aid claims and other tax reclaims
  • Liaison and negotiation with HM Revenue & Customs

Our aim is to help charities maximise income retention while remaining fully compliant.

Services for charities

Our charity clients typically engage us for a combination of services, including:

  • Statutory accounts preparation and SORP compliance
  • Independent Examination or audit
  • Specific fund or grant assurance reports
  • Advice on accounting systems and fund tracking
  • Payroll and PAYE compliance
  • Gift Aid and investment income tax reclaims
  • Attendance at Annual General Meetings
  • Trustee and finance training

A practical understanding of charity governance

Several members of the firm have acted as Trustees and Treasurers in a personal capacity, giving us a clear understanding of trustee responsibilities, governance pressures and regulatory expectations.

We see our role as supporting Trustees with clear, well-reasoned advice, helping them discharge their duties with confidence.

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