Charity income thresholds

The Charity Commission for England and Wales has reviewed the income thresholds for charities that determine the types of accounts they must produce, and the level of external scrutiny required.

The new details are set out below. We will be providing more information in the coming months and have an online Treasurers meetup event on 8 Dec where we will cover this in more detail. As always you can contact us if you have any questions on anything covered here.

External examination of accounts

The current and new thresholds are shown below. They are expected to come into effect on 30 September 2026 and apply to accounting years that end on or after 30 September 2026. They only apply to charities in England and Wales.

Requirement	Current threshold	New threshold
Accounts must be independently examined	Income over £25,000	Income over £40,000
Examination must be by a professionally qualified Independent Examiner	Income over £250,000	Income over £500,000
Accounts must be audited Group accounts must be prepared and audited	Income over £1,000,000 Assets over £3,260,000 Aggregate income of group £1,000,000	Income over £1,500,000 Assets over £5,000,000 Aggregate income of group £1,500,000

What’s the difference between independently examined and Examination by a professionally qualified Independent Examiner?

Independently examined means someone independent of the group should review the accounts. They do not have to be a qualified or a finance professional – but the trustees need to be confident they have relevant skills and experience.
Professionally qualified Independent Examiner means someone who has a formal Independent Examiner qualification – and is a member of an accounting professional body.

Who will this impact?

This will be welcome news for small charities run by time strapped volunteers. Groups with income between £25K and £40k will no longer require independent external scrutiny of their accounts. They may still choose to have external scrutiny, and of course will still need strong internal scrutiny from trustees and members, but the threshold increase will afford some flexibility in their approach.

For our larger member groups, the increase from £250,000 to £500,000 will offer potential time and cost savings if they no longer require qualified independent examiners.

The audit and group accounts threshold changes are unlikely to impact our groups.

Changes to the Charity SORP and accounting basis threshold

If your charity prepares accounts on an accruals basis then your annual accounts must follow the Charities Statement of Recommended Practice, commonly called the SORP. These are a set of rules and standards about what information must be presented in your annual accounts, and in what format.

Groups that produce accounts and a receipts and payment basis do not have to follow the SORP in their financial reporting.

The SORP has recently been updated, with new standards in place for reporting periods that fall on or after 1 January 2026.

At the same time the Charity Commission for England and Wales has increased the threshold at which charities must produce accounts on an accruals basis. This means more charities will have the option to produce accounts on a receipts and payments basis, and so not use the SORP.

Requirement	Current threshold	New threshold
CIOs, Unincorporated associations and Trusts can choose to produce receipts and payments accounts	Income below £250,000	Income below £500,000
Charitable companies	All have to produce accounts on an acrruals basis and follow the SORP.	No change

These threshold changes are expected to come into effect on 30 September 2026 and apply to accounting years that end on or after 30 September 2026.

Who will this impact?

Most of our members groups are either CIOs or unincorporated associations and under the current threshold. As such they will still be under the new threshold and will be unaffected.

Members that are Charitable Companies will have to follow the SORP as they always have and will need to be aware of the changes in the SORP.

Our Treasurer’s meetup event on 8 Dec will cover this topic. The new SORP requirements might be a factor in considering converting from a charitable company to a CIO.

What about Scotland and Northern Ireland?

OSCR is expecting to make changes to thresholds for charities in Scotland soon, although they are unlikely to be as high. We will provide updates once they are announced. The current information can be found on the OSCR site.

The Charity Commission for Northern Ireland do not have plans to increase the audit threshold for charities, which remains at an annual gross income of £500,000. Details are available on their site.