The short answer: for financial years ending on or after 30 September 2026, a charity in England and Wales needs an independent examination once its income is over £40,000, and a full audit once income is over £1.5 million, or gross assets are over £5 million and income is over £500,000. Above £500,000 income the examiner must be suitably qualified. Accounts must still be filed with the Charity Commission once income is over £25,000.
Scrutiny Thresholds for England and Wales
The thresholds rose for financial years ending on or after 30 September 2026. Earlier year ends use the previous limits.
| Requirement | Year ends before 30 September 2026 | Year ends on or after 30 September 2026 |
|---|---|---|
| Independent examination required | Income over £25,000 | Income over £40,000 |
| Qualified examiner required | Income over £250,000 | Income over £500,000 |
| Accruals accounts required (non company charities) | Income over £250,000 | Income over £500,000 |
| Audit required (income test) | Income over £1 million | Income over £1.5 million |
| Audit required (assets test) | Gross assets over £3.26 million and income over £250,000 | Gross assets over £5 million and income over £500,000 |
| Accounts filed with the Charity Commission | Income over £25,000 | Income over £25,000 (unchanged) |
Independent Examination vs Full Audit
- Level of assurance: an audit gives a positive opinion that the accounts show a true and fair view. An independent examination gives negative assurance: the examiner reports whether anything has come to their attention suggesting the records or accounts fail to meet the requirements.
- Work involved: an audit includes testing of controls and detailed verification. An examination focuses on comparing the accounts with the records, reviewing significant or unusual items and checking the accounts are properly prepared.
- Cost: an examination is proportionate for small and medium charities, keeping more funds available for charitable work.
Who Can Act as Examiner
Below the qualified examiner threshold, the examiner must be an independent person with the requisite ability and practical experience. Above it, the examiner must be a member of a body listed in section 145(4) of the Charities Act 2011, which includes the Association of Accounting Technicians, or a Fellow of the Association of Charity Independent Examiners. Ordinary ACIE membership on its own does not meet this requirement.
Receipts and Payments or Accruals Accounts
Non company charities with income at or below the accruals threshold can prepare simpler receipts and payments accounts with a statement of assets and liabilities. The Charities SORP applies only to accruals accounts. SORP 2026 applies to reporting periods beginning on or after 1 January 2026. Charitable companies must always prepare accruals accounts under company law.
Trustee Responsibilities and Deadlines
- Prepare the Trustees' Annual Report alongside the accounts.
- Keep accounting records for at least six years.
- File accounts, the examiner's or auditor's report and the annual return with the Charity Commission within 10 months of the financial year end where required.
- Charitable companies must also file accounts with Companies House within 9 months of the year end.
- Charitable Incorporated Organisations (CIOs) must file accounts with the Commission regardless of income.
Scrutiny Below the Statutory Thresholds
A charity's governing document, or the terms of a grant or funding agreement, may require an independent examination or audit even where income is below the statutory limits. Trustees should check both before deciding on the level of scrutiny.
Scotland and Northern Ireland
These thresholds apply to charities registered in England and Wales. Charities in Scotland are regulated by OSCR and those in Northern Ireland by the Charity Commission for Northern Ireland, each with separate accounting and scrutiny rules.
Why Work with Kingsley Accountancy
Tom Kingsley is qualified through full AAT membership (MAAT) to examine charities up to the audit threshold. He is also a member of the Association of Charity Independent Examiners and follows the Charity Commission's Directions for independent examination. We support charities across Hampshire and the UK with examinations, receipts and payments or accruals accounts and trustee reporting. See our charity independent examination and accounts services, or get in touch to discuss your charity.