Charity Commission lays the ground for digital accounts

The Charity Commission is working on plans to accept digital accounts from charities in an effort to make the data more accessible.

It has launched a consultation on the issue along with the Financial Reporting Council (FRC).

The two bodies are consulting on conventions for the electronic tagging of charity accounts.

Charities must already file accounts with HM Revenue & Customs using a system called iXBRL, and have the option of filing with Companies House. The Commission proposals would allow them to file accounts with the regulator in the same way.

iXBRL classifies accounts using a “taxonomy” – a digital listing which defines how computers read the individual items of financial data that are submitted in charity accounts. However the Commission said that smaller organisations may need more help to file digitally, and so it plans to develop accounts templates to help them.

Currently 70 per cent of companies file digital accounts with Companies House. The commission wants to enable charities to do the same, making it easier and quicker for those charities that have to file with both organisations.

In addition anyone using digital accounts will be able to extract the information that they want and analyse it more efficiently.

“If we can make filing digital accounts possible this will reduce administration for many charities whilst also opening up charity data not just for us but for those with a keen interest in sector trends and data,” said Nigel Davies, head of accountancy services from the Charity Commission.

“This could potentially simplify the submission of the annual return in the future by automatically using the computer readable information contained in the digital filing of tagged accounts.”

The consultation closes on 8 December after which the taxonomy will be finalised.

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