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Charities Act 2006

Commentary on Sections

Section 30: Group Accounts

120.Section 30 inserts new section 49A into the 1993 Act and gives effect to new Schedule 5A inserted into the 1993 Act by Schedule 6 to the Act. These introduce a requirement on a charity (“the parent charity”) which has subsidiaries under its control to prepare annual accounts relating to the whole group consisting of the parent and all of its subsidiaries. The present requirement is generally that the parent and each of its subsidiaries should prepare accounts relating to itself alone.

121.Paragraph 3 of new Schedule 5A provides the requirement for parent charities to prepare group accounts which must comply with regulations made by the Minister for the Cabinet Office regarding their form and contents. Paragraph 4 provides certain exceptions to the requirement to prepare group accounts, and enables regulations made by the Minister for the Cabinet Office to prescribe further exceptions. Paragraph 5 provides for the preservation of group accounts.

122.Paragraph 6 of new Schedule 5A makes provision for the audit of the accounts of larger groups, and paragraph 7 provides for the examination of accounts of smaller groups. The relevant gross income and asset thresholds for the purposes of determining larger groups would be prescribed in regulations made by the Minister for the Cabinet Office.

123.Paragraph 10 makes provision for the annual reports of parent charities to include such information as may be prescribed in regulations about the activities of their subsidiaries. It also includes a requirement for the group accounts to be submitted to the Commission with the copy of the annual report along with a copy of the report on the accounts made by the auditor or independent examiner.

124.Other provision made by new Schedule 5A includes supplementary provisions relating to audits of group accounts; the extension of the duty of auditors or reporting accountants to report matters to the Commission; provision relating to excepted and exempt charities; the requirement for group accounts to be available for public inspection; and an extension of relevant existing offences to the requirements to prepare group accounts

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