Charities annual returns and reports

Charity Services has sent out a reminder that all registered charities must file an Annual Return and a Performance Report every year.  These are required not only in years where there was activity undertaken by the charity.

Charity Services requires these reports so that charities remain transparent and accountable.

Templates for tier 3 and 4 Performance Reports are available on the Charity Services website and these will assist charities to meet the requirements of the financial reporting standards as well.

Charities with annual expenses over $30 million or with public accountability must report using tier 1 standards.  Other charities may choose to use a lower tier if they meet the criteria for that tier.  Tier 2 is for charities with under $30 million annual expenses without public accountability.  Tier 3 is for charities with under $2 million annual expenses without public accountability and Tier 4 is for charities with under $125,000 annual operating payments and also without public accountability.

Tier 1 charities must use the full financial reporting standards.  Tier 2 charities can use a reduced disclosure regime.  Tier 3 charities report on an accrual basis but in a simple format and Tier 4 charities also use a simple format but can report on a cash basis.

It is important that all charities comply with the requirement to file an Annual Return and an Annual Performance Report or they risk losing their charitable status.

Alan Knowsley
Partner
Wellington