Accountants for charities

Midlands Accountancy acts as accountant for charities and community organisations in Birmingham and the West Midlands, preparing charity accounts, fund records, Gift Aid paperwork and examination-ready books for registered charities, charitable incorporated organisations, charitable companies and smaller groups running on charitable lines. Charities answer to more people than most businesses do: trustees, funders, members, regulators and the public all have a stake in the accounts. Often our first contact is a treasurer who has inherited a spreadsheet, or a board that wants comfort that the figures presented at meetings are right. We meet boards in person across the West Midlands where that helps and work through cloud records the rest of the time. This page sits within our wider charity and community accountants hub, which covers the sector as a whole.

How charitable organisations are usually structured

Structure matters because it changes what must be prepared and where it is filed. Unincorporated associations and trusts sit under charity regulation alone, while charitable companies answer to Companies House as well. Charitable incorporated organisations sit somewhere between the two. Each structure carries its own reporting expectations, and trustees remain responsible for the accounts whichever form the charity takes. Tell us which form yours takes and we will tell you what has to be prepared and where each document has to go.

Income that behaves differently

A charity rarely has one income stream. Donations, grants, membership subscriptions, fundraising events, legacies, trading income and investment returns can all arrive in the same year, and they do not all behave the same way in the accounts. Grant income often comes with conditions. Trading income can raise tax questions that donations do not. GOV.UK’s guidance on charities and tax is the starting point, and where the position depends on the charity’s activities we say so and work it through properly.

Restricted funds, unrestricted funds and why the split matters

The distinction between restricted and unrestricted funds runs through everything. Money given for a stated purpose must be tracked against that purpose, held separately in the records and reported separately in the accounts. Spending restricted money on general running costs, even accidentally, is a serious problem for trustees. Good fund accounting is mostly good bookkeeping: a record structure that tags every receipt and payment to the right fund from day one. Our guides to restricted and unrestricted charity funds and what charity accounts should include explain the distinction and how the funds appear in the final accounts.

Records a charity should be keeping

The core records look familiar: bank statements, invoices, receipts, payroll data where there are staff, and minutes recording financial decisions. Charities add layers of their own, including grant agreements and their conditions, Gift Aid declarations, fundraising event records and evidence of how restricted money was applied. Our charity bookkeeping records checklist sets the full picture out. Our bookkeeping service can maintain these records for you, structured around funds from the start.

Almost every problem we are called in to fix starts in this record set rather than in anyone’s conduct: fund accounting done loosely or not at all, Gift Aid claimed with no declarations behind it, grant conditions filed away and never read again, a volunteer treasurer left with no support and no handover, and accounts produced in a format the funder or the regulator will not accept. None of it begins as dishonesty. It begins as record keeping that was set up for a small club and never rebuilt for a charity.

Independent examination and audit explained

Charity accounts above certain levels need external scrutiny, and the two forms it takes are different in depth and cost. An independent examination is a review: the examiner checks the accounts against the records and reports whether anything of concern came to light. An audit is a much fuller exercise, with the auditor forming a positive opinion on whether the accounts give a true and fair view. Which one applies depends on the charity’s size and its governing document, and the current thresholds are published by the charity regulator and on GOV.UK. Our guide to independent examination vs audit sets the two out side by side. We can tell you which regime applies to your charity and get the records and accounts ready for whichever review it needs.

Tax, Gift Aid and filings

Charities enjoy reliefs but are not outside the tax system. Gift Aid claims need valid declarations and clean records. Trading activity can create a tax liability depending on its nature and scale. Charities with employees run payroll like any employer, with workplace pension duties, which our payroll service handles. VAT is genuinely complicated for charities because trading, fundraising and property activities can each be treated differently, so tell us what the charity actually sells and we will work the position through before anything is filed. Annual returns and accounts go to the charity regulator, and charitable companies file with Companies House too.

Management figures for trustee meetings

Trustees make better decisions with current numbers. A simple regular pack showing income and spending against budget, fund balances and cash position turns the treasurer’s report from a formality into a tool. Cash flow deserves particular attention because grant income is lumpy: money arrives in blocks and must last a year.

What our accountants for charities take on and what stays with trustees

We prepare charity accounts, maintain the bookkeeping, run payroll, handle Gift Aid records, prepare management figures for the board, and get the records and accounts ready for external scrutiny. We do not carry out independent examinations ourselves: an examiner must be independent of the preparation work, so the examination sits with a separate examiner, and where a charity needs an audit we prepare the ground and work alongside the auditor. Legal questions about governing documents or charity law sit with a solicitor, and trustees always retain legal responsibility for the accounts.

Getting a quote for your charity

Engagement starts with a conversation about your structure, income, funds and what scrutiny your accounts need. Send us the last set of accounts if there is one, say how many separate funds are being tracked and whether anyone is on the payroll, and be honest about how far behind the bookkeeping has fallen. That is enough for us to put a fixed fee in writing.

Frequently asked questions

Do small charities need an accountant at all?

Not by law. Many small charities run on a capable volunteer treasurer. The value of outside help grows with income, staff, restricted funds and funder reporting requirements.

Can the same firm do our bookkeeping and our independent examination?

No, and you should be wary of any firm that offers both. An examiner should not review their own work, so we keep to the bookkeeping and accounts side and the examination goes to an independent examiner. We prepare the file so that examination is as quick as possible.

What happens if restricted funds were spent on the wrong things?

It needs to be identified, quantified and put right, and trustees may need to consider whether the funder or regulator should be told. The first step is establishing the facts from the records, which we can help reconstruct.

Our treasurer has resigned. Can you fill the gap?

We can take on the bookkeeping, reporting and accounts preparation that a treasurer typically does, though the trustee role itself must remain with a person appointed by the charity.

Do charities pay tax on fundraising events?

Sometimes. GOV.UK sets out the reliefs available for fundraising events. Tell us what the event was, who ran it and how many you hold in a year, and we will confirm the treatment before anything goes in the accounts.

If your charity needs accounts, examination-ready records or simply better bookkeeping, request a quote and tell us a little about the organisation, and we will set out exactly what we would do and what it would cost.