Consultation focuses on taxonomy in effort to reduce administration for charities and open up data
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), emphasising the importance of the taxonomy to be used in classifying the information submitted in a file.
Currently 70% of companies file digital accounts with Companies House. The commission wants to enable charities to do the same, making it easier for those that have to file with both organisations, and for anyone to extract and analyse the information.
It said that charities filing tax returns with HM Revenue & Customs will also benefit from having the option of digital filing when submitting supporting accounting information.
Nigel Davies, head of accountancy services at the Charity Commission, said: “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. I hope charity finance professionals will engage with our joint consultation and move us closer to making the option of digital filing a reality.
“The charity taxonomy is a type of digital data dictionary which defines the computer-readable tags that identify individual items of financial data in charity accounts for electronic filing and for other analytical purposes. This could also 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 taxonomy was developed by the Charity Commission and FRC to improve the quality of electronic tagging of charities’ accounts.
One of the issues faced by the commission is that enabling tagging and submission of iXBRL accounts – the format used for company submissions to HMRC – may not provide sufficient help to small charities in filing digitally. In response, it plans to develop an accounts templates.
It also said it will retain the option to file accounts as PDF documents.
The consultation is due to run until 8 December, following which the commission will finalise the taxonomy.
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