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This publication is available at https://www.gov.uk/government/publications/related-party-transactions-information-for-academy-trusts/declare-or-seek-approval-for-related-party-transactions-summary-guidance
1. Declaring related party transactions
From 1 April 2019, in addition to existing requirements, academy trusts must declare their intention to enter into a new agreement with a related party before confirming the transaction with their supplier.
This reporting requirement relates to new agreements made with related parties on or after 1 April 2019.
Introducing the reporting requirement does not change the scope of what is deemed a related party transaction. The Financial Reporting Council’s FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland defines what is meant by a related party and what needs to be disclosed in financial statements. The Charity Commission’s Statement of Recommended Practice provides additional useful information. You can read about the principles applying to related party transactions in section 3.10 of the Academies Financial Handbook.
Academy trusts do not need to declare income transactions with related parties, including donations to the academy trust from related parties, between April and September 2019. We will review our approach for reporting these transactions before September 2019.
In line with 3.10.7 of the Academies Financial Handbook, salaries and other payments made by an academy trust to a related party under a contract of employment through the academy trust’s payroll are not in scope of this new reporting requirement.
Academy trusts must continue to report all related party transactions, including those agreed between 1 September 2018 and 31 March 2019, in their 2018/19 financial statements, following guidance set out in the Academies Accounts Direction.
2. Seeking approval for related party transactions
Academy trusts must seek prior approval from ESFA when:
- a single contract or agreement with a related party exceeds £20,000
- a contract or agreement of any value means the total value of contracts or agreements with the same related party exceeds £20,000 in a financial year
3. Preparing to complete the online form
Academy trusts must declare or seek approval using the related party transactions online form.
You need to have all information and documents ready before starting the online form. It’s not possible to partially complete the form and return to it.
You need an IDAMS account to use the form. To set up an account and approve other users, follow the guidance How to register for an IDAMS account.
4. Do you have any questions?
Please contact ESFA enquiries. Please put “related party transactions” at the top of your enquiry.