Regulation · October 2026
New charity thresholds: do you still need an audit?
Several key charity thresholds in England and Wales increased for financial years ending on or after 30 September 2026. For many charities this means less external scrutiny, simpler accounts or a choice between audit and examination.
What changed
| Threshold | Before | Now |
|---|---|---|
| No external scrutiny needed | Income £25,000 or less | Income £40,000 or less |
| Receipts and payments accounts allowed (non-company charities) | Income up to £250,000 | Income up to £500,000 |
| Examiner must belong to a listed accountancy body | Income over £250,000 | Income over £500,000 |
| Statutory audit (income test) | Income over £1 million | Income over £1.5 million |
| Statutory audit (assets test) | Income over £250,000 and gross assets over £3.26 million | Income over £500,000 and gross assets over £5 million |
The new limits apply to financial years ending on or after 30 September 2026. Accounts for earlier years still use the old limits.
What it means for your charity
Income between £25,000 and £40,000
You no longer need an independent examination by law. Check your governing document and grant agreements before you stop, as some funders still expect external scrutiny. Many small charities choose to keep one because it reassures trustees and donors.
Income between £250,000 and £500,000
If you are a trust, unincorporated association or CIO, you may now be able to prepare simpler receipts and payments accounts. Charitable companies must still prepare accruals accounts under SORP.
Income between £1 million and £1.5 million
If your gross assets are £5 million or less, you may be able to move from audit to independent examination. That can reduce costs, but think about what your funders, lenders and trustees need. Some funding agreements require an audit regardless of the law.
What to do now
- Check which year end the change first applies to for your charity.
- Read your governing document and funding agreements for any audit or examination requirement.
- Discuss the options with your trustees and record the decision in your minutes.
- If you change examiner or move from audit, plan the handover early.
Scotland and Northern Ireland have their own thresholds. If your charity is registered there, ask us before relying on this summary.
This article is general guidance, not advice for your specific circumstances. Sources: Browne Jacobson, ICAEW.
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