Accounting for charities: the essentials

26th November 2018

Dealing with charities is not a service offered by all accountants, many of whom prefer to focus on business clients. 

There’s no getting away from the fact that handling the accounts of a charity can be complex, but it’s a task we relish at Thomas Barrie.

We’re happy to take on a charity’s books which are lagging months behind or to reconcile multiple banks accounts. 

While these tasks can make submitting management accounts mightily tough, it’s all part of the exemplary service we offer to charities. 

How we prepare charity accounts? 

Our experts mostly prepare  charities’ accounts using the accruals basis. 

Under this system, the costs and income of an activity is allocated on either when the liability was incurred or when there is certainty about the income received. 

We also prepare accounts for charities using receipts and payments, which essentially summarises all cash received and paid into a charity bank account. 

This is commonplace for charities in Scotland that are not classed as a company, and turns over less than £250,000 in the financial year. 

How we prepare your charity’s accounts can also be determined by what’s outlined in its constitution, while we apply gift aid relief equal to the rest of the UK basic rate of tax.

Move to digital accounting software

On occasions, we’ve had charity clients that used desktop accounting software. 

While there’s nothing wrong with this, there is the potential for your records to be corrupted. This problem can be made worse by not uncovering the corruption in enough time. 

For these reasons, and with the rollout of Making Tax Digital (MTD) getting under way on 1 April 2019, we recommend using digital accounting software. 

At Thomas Barrie, we submit most tax returns – for individuals, businesses, and charities – using Iris Kashflow, which integrates with our own accounting system. 

This backs up your records and protects them online, while also offering you the facility to access your records from any device with an internet connection. 

What’s more, you control who can see your records and there’s also an authentication process that provides another layer of security. 

Upcoming changes to affect charities

South of the border, Westminster is introducing a range of measures to reduce administrative burdens on charities from April 2019. 

It remains to be seen whether Holyrood will adopt the same concessions when its Budget is announced on 12 December 2018. 

Get in touch

We prepare statutory accounts for charities, and can help you prepare for the reporting requirements from the Scottish Charity Regulator

For more information, speak to one of our experts by calling 0141 221 257 or email us at 

If you’re interested in working with us and wish to discuss your requirements then please call us on 44 (0) 141 221 2257 or email

Atlantic House
1A Cadogan Street
G2 6QE


There is another entrance to the building at 45 Hope Street, G2 6AE.

More details