Important information from the Charities Commission
The Charities Commission will no longer accept incomplete Annual Returns
Much of the research looking into what drives public trust and confidence in charities, and donor’s giving behaviour, shows that the public expect charities to be open, transparent and accountable.
And that starts with the very basics, such as ensuring complete Annual Returns and financial statements are filed with the Charities Commission on time, as required by the Charities Act. For this reason, the Commission will now no longer accept incomplete or incorrect Annual Returns.
From the date of this email, we will no longer accept incomplete Annual Returns or publish them on your charity’s summary page on the Charities Register.
A “complete” Annual Return consists of:
- an Annual Return form (Form 4 http://www.charities.govt.nz/forms/annual-return), with all applicable questions completed, including Question 25 (essential) and
- a copy of your charity’s financial statements.
If either of these is not filed within six months of your financial year-end, your charity’s online record, viewable on the public Charities Register, will show the Annual Return as missing. That could potentially affect public perceptions of your charity, and possibly damage public confidence in its ability to work effectively.
If the Commission receives an incomplete Annual Return, we will do our best to contact the charity to ask for the missing information. This includes charities whose Form 4 simply says “see accompanying financials” in response to Question 25 in Form 4 - this response doesn’t meet the requirements of the legislation.
“Incomplete” also includes Returns that don’t include financial statements for a full financial year, or that are for the wrong financial year, or that belong to a (non-registered) related organisation. We have found, for example, that some charities have filed accounts for the larger non-charitable “parent” entity to which they belong, instead of their own – charitable – accounts.
If we don’t receive any reply or the missing/correct information within a reasonable time, the charity will be deregistered – and will no longer be able to access all the benefits of registration, including tax exemption. Donee status (granted by Inland Revenue) may also be revoked, which means that donors can no longer claim tax credits on their donations.
We encourage you to file complete, correct Annual Returns, as the legislation requires, and to file them on time (within six months of your balance date).
Helpful tip: the date on which your charity’s Annual Return is due is shown on your charity’s summary page on the Charities Register http://www.register.charities.govt.nz/CharitiesRegister/Search.aspx
By filing a complete Annual Return and meeting all your other obligations, you can comply with the law’s requirements to remain registered, contribute to public trust and confidence in the charitable sector, and remain eligible for the tax and other benefits of charitable status.
If you need help completing your Annual Return, please make use of the Annual Returns help
http://www.charities.govt.nz/compliance/annual-return/ on our website, including our Annual Return checklist http://www.charities.govt.nz/news/information-sheets/annual-return-checklist and Annual Return financial information help notes http://www.charities.govt.nz/news/information-sheets/annual-return-help-notes/
Most people tell us that filing their Annual Return is relatively straightforward (especially if they file it by logging in http://www.register.charities.govt.nz/login.aspx and completing it online).