Ensuring compliance: Financial systems and controls - ongoing requirements

Financial systems - ongoing requirements. Actions to take:

Financial and accounting records

Your social business needs to maintain accurate financial and accounting records. Annual accounts need to be prepared usually for a period of 12 months to your accounting reference date, i.e. your accounting year end(financial year end).  Your accounting reference date will be determined when you first establish the business although you can change it through your regulator. 

The level of detail to be included in your accounts will depend on the financial size of your business with less detail required from smaller organisations. 


Running a Limited Company 

Prepare Annual Accounts for Limited Company 

Retention of records

Business records should be kept for a minimum of 6 years from the end of your accounting period (financial year end).


Running a Limited Company 

Filing of annual accounts

Production and filing of annual reports and accounts with regulator within specific reporting deadlines. This is usually within 9 months from your accounting year end for Companies House, 10 months for Charity Commission and within 6 months of AGM for Societies registered with the FCA. The format of your accounts will be determined by the legal status of your business. 


Accounts and Tax Returns 

FCA Annual Returns for Mutual Societies 

Prepare Charity Annual Accounts 

Audit of accounts

Accounts should be audited or independently examined in line with the requirements of your regulator and the relevant legal context. There are audit exemptions for small companies and reduced reporting requirements for smaller charities 

Rules on who can be an auditor or independent examiner are also given, but as a general principle, this should be an auditor or an individual with no personal or direct interest in your business. 


Audit Exemption for Private Limited Companies 

Charity Reporting and Accounting 

Tax authorities

Tax applies to all businesses regardless of their legal status and charitable position. You need to consider and account for Corporation Tax, PAYE, National Insurance and VAT as appropriate. 


Corporation Tax 

Business VAT 

Charity VAT 

Fundraising laws

Specific laws and regulations apply to fundraising if your business is registered as a charity. The Code of Fundraising Practice can be applied as good practice by any organisation. 


Fundraising Code 


In this section:

Detailed guidance on systems and procedures for business compliance

Ensuring compliance: Governance systems and records

Ensuring compliance: Financial systems and controls - set-up requirements

Ensuring compliance: HR systems and procedures

Ensuring compliance: HR systems - Spotlight on ‘Managing people’

Ensuring compliance: Managing assets and resources - Spotlight on ‘Assets’