Charity finance · Accounts

Charity audit and accounting thresholds: 2026 checker

Enter your accounting year end, income, assets and structure to see whether your charity needs accruals accounts, an independent examination or a full audit. The tool applies the right threshold set for your year end, and the guide below explains every threshold for England and Wales, Scotland and Northern Ireland.

Published by ·Last updated 24 September 2026·11 min read

Charity accounting threshold checker

Tells you whether your charity needs accruals accounts, an independent examination, or a full audit. Enter the accounting year end and the checker will apply the current thresholds before 30 September 2026 or the new thresholds for years ending on or after that date.

1. When does the accounting period end?

The new thresholds apply to accounting years ending on or after 30 September 2026. Earlier year-ends use the current thresholds.

2. Gross income for the accounting year (£)

Total income before any deductions. Use the figure from your accounts, not net.

£
3. Aggregate value of assets before liabilities at year end (£)

Use the aggregate value of the charity’s assets before deducting liabilities. Include cash, investments, property and equipment at the values used in the accounts. Enter 0 if there are no assets.

£
4. Legal structure
5. Where is the charity registered?
Enter the accounting period end, gross income and aggregate asset value above to see your accounting requirements.

The thresholds, plainly

TriggerYear ending on or after 30 Sep 2026Year ending before 30 Sep 2026
Independent examination required (income)£40,000£25,000
Qualified examiner required (income)£500,000£250,000
Audit required (income)£1,500,000£1,000,000
Audit required (combined assets and income test)Assets > £5m and income > £500kAssets > £3.26m and income > £250k
Receipts & payments accounting permitted up to (income)£500,000£250,000
Group accounts required (group income)£1,500,000£1,000,000

Income figures are gross, not net. For the combined audit test, assets means their aggregate value before deducting liabilities. The new thresholds are set by the Charities Acts 1992 and 2011 (Substitution of Sums) Order 2026 and apply to accounting years ending on or after 30 September 2026; earlier year-ends use the previous thresholds. At or below £40,000 income, charity law requires no external scrutiny under the new thresholds.

Thresholds that are not changing

Requirement (England & Wales)Applies when income is
Register with the Charity CommissionOver £5,000 (CIOs register whatever their income)
File an annual returnOver £10,000 (every CIO files one); registered charities at or below £10,000 give an income and spending update instead
Send accounts and the trustees' annual report to the CommissionOver £25,000 (every CIO sends them)

Trustees must still prepare accounts and a trustees' annual report every year (Charities Act 2011 s.162), even when they do not have to send them to the Commission. The annual return is due within 10 months of the year end.

Receipts & payments vs accruals

Receipts & payments (R&P)accounts are the cash-based option: a statement of money in and money out, plus a statement of assets and liabilities. They are permitted for non-company charities, including CIOs, at or below the income limit: £250,000, or £500,000 for accounting years ending on or after 30 September 2026. Charitable companies cannot use R&P; CICs follow company accounting rules rather than the charity R&P regime.

Accruals accountsare the “true and fair view” option: a statement of financial activities (SoFA), balance sheet and notes. They are compulsory above the income limit and for charitable companies, but incorporation as a CIO does not by itself remove the R&P option. Charity accruals accounts must follow the Charities SORP.

The Charities SORP 2026

The new SORP, published 31 October 2025, applies to accounting periods beginning on or after 1 January 2026. It uses three tiers:

  • Tier 1: income up to £500,000 (most small charities)
  • Tier 2: £500,000 to £15m
  • Tier 3: over £15m

Charities comply with their own tier and all tiers below. The changes that matter most to small charities preparing accruals accounts:

  • Lease accounting: most operating leases are brought on to the balance sheet as a right-of-use asset and liability (Module 10B). The donation element of a below-market (peppercorn) lease is recognised at fair value, which matters for village halls and small charities paying nominal rent
  • Income recognition: a five-step model for exchange transactions such as fees for services and local authority contracts
  • Trustees' annual report: every tier must summarise main achievements and future plans; Tier 2 and 3 charities must explain their impact; charities with no reserves or negative net assets must explain why they are still a going concern

Scotland and Northern Ireland

Scotland (OSCR):all Scottish charities register with OSCR whatever their income. Every Scottish charity sends OSCR its annual return, accounts, trustees' annual report and an independent examiner's or auditor's report within 9 months of its year end; there is no income floor for independent examination. R&P accounts are capped at £250,000. For financial years beginning on or after 1 January 2026, the Scottish audit threshold rises from £500,000 to £1m (SSI 2025/341), still lower than the new £1.5m England and Wales threshold.

Northern Ireland (CCNI):R&P is permitted up to £250,000 income, every registered charity needs an independent examination or audit, the examiner must be a member of a listed professional body above £250,000, and audit is required above £500,000. CCNI applies SORP 2026 alongside the Charity Commission and OSCR. The tool above covers England and Wales only.

Practical year-end cycle for a small charity

  1. Close the books within a month of year end. Reconcile the bank, Gift Aid claims, and restricted and unrestricted balances
  2. Prepare draft accounts, R&P or accruals depending on threshold and legal form
  3. Draft the trustees' annual report
  4. Independent examination or audit where required; see independent examination for finding an examiner and what it costs
  5. Trustees approve the accounts at a minuted board meeting
  6. File the annual return with the Charity Commission within 10 months of year end. Charitable companies and CICs also file with Companies House
  7. Present the accounts to members at the AGM where applicable

What the tool doesn't do (yet)

  • Group accounts. Charities with subsidiaries have separate consolidated-account rules (see the table above).
  • Funder or governing-document overrides. The tool computes the statutory minimum. Your specific obligations may be higher.
  • Scotland and Northern Ireland. Different regimes; the tool refers you to OSCR and CCNI.
  • Special cases.Some bodies, such as academy trusts, follow their own regulators' rules.

Frequently asked

What changes on 30 September 2026?

For accounting years ending on or after 30 September 2026, the statutory thresholds rise. Independent examination is required above £40,000 gross income (previously £25,000). The qualified-examiner threshold rises from £250,000 to £500,000. The receipts-and-payments ceiling rises from £250,000 to £500,000. Audit is required above £1.5m income, or when aggregate assets before liabilities exceed £5m and income exceeds £500,000. Years ending before 30 September 2026 use the previous thresholds: audit above £1m income, or when aggregate assets before liabilities exceed £3.26m and income exceeds £250,000.

Does my governing document override these thresholds?

Yes, frequently. Many older constitutions require an audit even where the law doesn't, or specify a particular qualification for the examiner. Check your governing document before commissioning examination work. If you want to drop a self-imposed audit, that usually requires a constitutional amendment with Charity Commission approval (for England & Wales charities).

What about funders?

Some funders require audited accounts as a grant condition regardless of the legal thresholds. Check the grant agreement before deciding the level of scrutiny. Some funders will accept an independent examination if you explain why it is sufficient; others won't.

What's the difference between independent examination and audit?

An independent examination is a limited-scope review by a competent person, who confirms that the accounts agree with the underlying records and that there's nothing materially wrong. It's cheaper and quicker than an audit. An audit is a full Companies Act-equivalent process: sampling transactions, testing internal controls and giving an independent opinion on whether the accounts give a true and fair view. An audit usually costs several thousand pounds even for a small charity, while a small charity with tidy receipts-and-payments accounts can often find an independent examiner for under £500.

Who can do an independent examination?

For income up to £500k (£250k for years ending before 30 September 2026), any competent person independent of the charity. Many trustees use a local accountant, retired finance professional, or charity-experienced bookkeeper. Above that qualified-examiner threshold, the examiner must be a member of one of the bodies listed in section 145 of the Charities Act 2011 (ICAEW, ICAS, CAI, ACCA, AAPA, AAT, AIA, CIMA, the Chartered Governance Institute, CIPFA, IFA or CPAA) or a Fellow of the Association of Charity Independent Examiners. Charity Commission CC31 and CC32 list the recognised bodies. For audit, the auditor must be a registered auditor with one of the recognised supervisory bodies.

I'm a charitable company. Are these thresholds the same?

Independent examination and audit thresholds yes — they're set by the Charities Act 2011 and apply to all registered charities in England & Wales regardless of structure. But charitable companies must always prepare accruals accounts under the Companies Act 2006 — receipts and payments is never an option, no matter how small. A charitable company that is exempt from a Companies Act audit still needs an audit if it meets the Charities Act audit threshold, and its balance sheet must state that it is exempt from a Companies Act audit.

What if my income is irregular — one big year, several quiet ones?

The threshold test is annual, so a single high-income year can trigger audit even if the charity is normally well below. Plan ahead: if you know a one-off grant or legacy will push income above £1.5m, commission an audit early (auditors get booked up). If your income normally hovers near a threshold, consider building in scrutiny one tier up so you're not switching providers every year.

Related guides

Sources

General information, not regulatory or audit advice. The tool handles the headline statutory thresholds for England & Wales charities. For complex cases (group accounts, structural changes, near-threshold years), get the answer confirmed by a charity-experienced accountant or the Charity Commission.