Good news for many charities. The Charity Commission has increased a number of key financial thresholds for accounting, independent examination and audit requirements for financial years ending on or after 30 September 2026.
What’s changing?
The most significant increases are:
- The requirement to prepare accruals accounts increases from £250,000 to £500,000 income.
- The independent examination threshold increases from £25,000 to £40,000 income.
- The threshold requiring a professionally qualified independent examiner increases from £250,000 to £500,000 income.
- The general audit threshold increases from £1 million to £1.5 million income.
- The audit threshold based on income and assets increases from £250,000 income and £3.26 million assets to £500,000 income and £5 million assets.
What does this mean for charities?
Many smaller and medium-sized charities will benefit from simpler reporting requirements and potentially lower compliance costs. In particular, charities with income between £1M and £1.5M will no longer require an audit.
Our view
While the changes reduce regulatory burdens, trustees should still consider whether accruals accounts provide more useful financial information for funders, stakeholders and decision-making. Receipts and payments reporting is not always the best option for every charity.
If you’d like to discuss how these new thresholds affect your charity’s accounts, independent examination or audit requirements, please get in touch.
Source: Charity Commission guidance updated 16 September 2026.