What should be in your Trustees’ Annual Report?

Category: Charities - Posted On: Mar 22 2019

As a trustee of a Scottish charity, one of your legal requirements is to prepare a Trustees’ Annual Report (TAR) for inclusion in the annual accounts. This report makes up the narrative part of your accounts, addressing the questions: who does your charity help? What has the charity done? What has been achieved? So rather than viewing this as a ‘tick box’ exercise, this report should be used to helping users of the accounts understand the figures included in the accounts.

Office of the Scottish Charity Regulator (OSCR) Head of Professional Advice and Intelligence, Laura Anderson, commented, “There is one tool that every charity can use to show how good they are at what they do. This is the Trustees’ Annual Report (TAR) – making sure that you are clearly explaining to your supporters, beneficiaries and the wider public what you do and what difference it is making can help you build the strong relationships you need to continually develop your organisation.”

There are specific legal requirements setting out how these issues are covered, which vary depending on whether you prepare ‘Receipts and Payment accounts’ or ‘Fully accrued accounts’. Receipts and Payments accounts can be prepared by charities which are not a companies where gross annual income is less than £250,000, and which have no other requirement to prepare accrued accounts e.g. the charity’s governing document may specify that accrued accounts must be prepared or certain funders may impose this condition. In any other circumstance, fully accrued accounts must be prepared.

The table below outlines the areas that the Trustees’ Annual Report must legally cover:

Receipts and payments accountsFully accrued accounts
Charity registered nameCharity registered name and any other names used
Charity numberCharity number and company registration number if applicable
Charity’s principal addressCharity’s principal address and registered office address if a company
Names of the charity trustees on date of approval of Trustees’ Annual Report *Names of the charity trustees on date of approval of Trustees’ Annual Report *
Names of all other charity trustees who served during the year *Names of all other charity trustees who served during the year *
Type of governing document (e.g. Trust Deed or Constitution)Type of governing document and details of how the charity is constituted (e.g. limited company, unincorporated association, SCIO)
Details of trustee recruitment and appointment proceduresDetails of trustee recruitment and appointment procedures
Summary of charitable purposesSummary of charitable purposes and description of main activities
Summary of the main activities and achievements of the charitySummary of the main achievements of the charity
Policy on reservesFinancial review explaining financial position of charity at year end
Details of any deficit (when more has been spent than received)Policy on reserves
Donated services and facilities (does not include donated goods for resale)Details of any deficit (when more has been spent than received)
Details of any going concern uncertainty (if the charity may not be able to continue its activities for at least the next 12 months)
* unless the charity is entitled to exclude the names because of safety concerns (decided by OSCR)

Please note that if your charity’s income is over £500,000, there are additional requirements set out in the Charities Statement of Recommended Practice. Our dedicated team can provide further advice on these requirements, if relevant to your charity.

For further advice on what type of accounts you should be preparing and guidance on writing your Trustees’ Annual Report please contact a member of our EQ Charities team via charities@eqaccountants.co.uk or contact one of our offices.