All registered charities with an annual income over £10,000 and all CIOs - charitable incorporated organisations - are required to complete and file online with the Charity Commission an Annual Return in a prescribed form within ten months of their financial year end.

Just before Christmas, the Commission confirmed details of new and revised questions in the Annual Return.

The responses to a couple of those additional questions will appear on a charity’s entry on the register of charities maintained by the Commission and so will provide the giving public and policymakers with additional information about their operation - for example, a breakdown of its income into donations/ legacies, charitable activities, other trading activities and investment, and the total amount spent on employee payroll in the financial year in question.

The responses to most new questions will not be made public and instead are designed to increase the quality and quantity of information about charities, which is to be made available to the Commission, to enable it to act as a more proactive regulator, informed by sector trends and insights.

The new question set is the result of a three month public consultation last year. It will apply to the financial years of registered charities ending on or after 1 January 2023 and can be accessed here:

Annex 8: Charity Annual Return questions 2023 - GOV.UK (www.gov.uk)

This question set provides a useful checklist of key issues of importance to the regulator and also to charities in helping them to achieve sound governance.

In particular, charities are now to be asked to select from a list of 14 policies and procedures and confirm those that they have in place.

While the number of policies and their subject matter will depend on any particular charity, and the most comprehensive and well thought-out policies won’t be worth the paper they are written on if they are not properly implemented, the Commission says in its guidance that it expects most charities to have policies and procedures in place to cover the following: internal financial controls; safeguarding; financial reserves; risk management; trustee expenses; conflicts of interest; and serious incident reporting.

It may of course be appropriate for some charities to have policies on other issues - for example, on investing charity funds, bullying and harassment and the use of social media.

2023 is likely to be extremely tough for a charity sector facing greater demand at the same time as reducing donations and increased costs. Good governance is no guarantee of survival, but without it charities are unlikely to attract the support they need to continue to make a difference.