Commentary on Provisions The schedule Paragraph 12 – Retention of accounting records
175.Section 44 of the 2005 Act requires charities to keep proper accounting records.
176.Originally, these records were required to be kept for 6 years from the end of the financial year in which they are made. However, it is possible that the preparation of records could span two financial years (for example, where preparation of the records begins during the financial year to which they relate, but is completed after the end of that financial year). In such a case, it may become difficult to establish the period for which those records are to be kept. Even where the preparation of the records did not span more than one financial year, information to this effect would need to be retained so that it was clear when the records could be disposed of.
177.In addition, the previous requirement to keep financial records for the specified period applied only to charities. No provision was made about former charities – for example, bodies which have ceased to be charities or those which have wound up altogether.
178.Sub-paragraph (2) of this paragraph of the Act’s schedule therefore adjusts the rule found in section 44(2) of the 2005 Act so that financial records will now instead have to be kept for 6 years from the end of the financial year to which they relate (regardless of when the records themselves were prepared).
179.In addition, sub-paragraph (3) of this paragraph of the Act’s schedule inserts a new rule which provides that where the charity ceases to be a charity before the end of the retention period, the records must be held for the remainder of that period by someone else. This obligation is imposed as follows—
	Where the body continues to exist without charitable status, it will be the body itself which must retain the records.
	Where the body no longer exists, the records must be retained (where applicable) by someone who is notified to OSCR and who was its charity trustee immediately prior to the body ceasing to exist. This means that the body will need to notify OSCR of who this person is (and update OSCR if that changes). This will only apply in a situation where the charity was removed from the Register as a result of being wound up or dissolved etc. If the body continued to exist as a non-charitable body, nobody will have been a charity trustee of it immediately before it ceased to exist.
	Where the body no longer exists and was not on the Register at the point of ceasing to exist, the records must be retained by someone notified to OSCR who was concerned in its management or control immediately prior to it ceasing to exist (for example, in the case of a company, one of its directors). Again, there is an implicit duty on the body to notify OSCR as to who is nominated to hold the accounts.