Compliance · Accounting

Charity accounting thresholds

Which accounts you file, who has to examine them, and when the audit kicks in. Current rules and the new thresholds for years ending on or after 30 September 2026.

Published by The Committee Room·Last updated 15 July 2026·6 min read

The current thresholds (E&W)

Income	Register?	Annual return?	Accounts type	Scrutiny
£5,000 or less	Not ordinarily (non-CIO); CIOs must register	If registered: income and spending report; CIOs file a return	R&P permitted (non-company)	Trustee oversight
Over £5,000 to £10,000	Yes (E&W)	Income and spending report	R&P permitted (non-company)	Trustee oversight
Over £10,000 to £25,000	Yes	Yes (within 10 months of YE)	R&P permitted (non-company)	Trustee oversight
Over £25,000 to £250,000	Yes	Yes	R&P permitted (non-company); else accruals	Independent examination required
Over £250,000 to £1m	Yes	Yes	Accruals (SORP)	Independent examination by a qualified examiner, unless the combined assets-and-income audit trigger applies
Over £1m (or assets >£3.26m and income >£250k)	Yes	Yes	Accruals (SORP)	Audit required

The 30 September 2026 threshold changes

The Charities Acts 1992 and 2011 (Substitution of Sums) Order 2026 applies the new figures to accounting years ending on or after30 September 2026:

Audit thresholds rise: income £1m → £1.5m; the combined test becomes assets over £5m and income over £500k
R&P option ceiling rises: £250,000 → £500,000
Independent examination floor rises:£25,000 → £40,000
Qualified-examiner threshold rises: £250,000 → £500,000
Group accounts threshold rises: £1m → £1.5m

Unchanged: registration threshold (£5,000), annual return threshold (£10,000), filing-accounts threshold (£25,000).

For many small charities, the IE floor rise from £25k to £40k means cheaper compliance under the new regime — no external scrutiny is required by charity law at or below £40k income.

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. It is permitted for non-company charities, including CIOs, at or below the income limit: currently £250k, or £500k for accounting years ending on or after 30 September 2026. Charitable companies cannot use R&P; CICs follow separate company accounting rules.

Accruals accountsare the “true and fair view” option: a statement of financial activities (SoFA), balance sheet, 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 — SORP 2026 applies to accounting periods beginning on or after 1 January 2026.

The Charities SORP 2026

The new SORP, published 31 October 2025, applies a three-tier proportionality framework:

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

Charities comply cumulatively with their own tier and all tiers below. Key SORP 2026 changes affecting small charities:

Lease accounting — most operating leases must be brought on-balance-sheet as a right-of-use asset and liability (Module 10B). New peppercorn-rent rule recognises the donation element of below-market leases at fair value — relevant for village halls and small charities at nominal rent
Income recognition — five-step IFRS 15-style model for exchange transactions (services for fees, contracts with local authorities)
Trustees' Annual Report — mandatory impact reporting (all tiers), refreshed reserves narrative, mandatory future plans, going-concern question for loss-making charities

Scotland (OSCR) and Northern Ireland (CCNI)

Scotland:all Scottish charities register with OSCR regardless of income. Full accounts required when income exceeds £25,000. R&P option capped at £250,000. From accounting periods beginning on or after 1 January 2026, OSCR's audit threshold rises from £500,000 to £1,000,000 — still lower than the new £1.5m E&W threshold.

Northern Ireland: CCNI registration on call-forward (no minimum income threshold). Thresholds broadly follow GB but with NI-specific filing portals. CCNI applies SORP 2026 in parallel with the Charity Commission and OSCR.

Practical year-end cycle for a small charity

Close the books within a month of year end. Reconcile bank, gift aid claims, restricted vs unrestricted balances
Prepare draft accounts— R&P or accruals depending on threshold and form
Draft the Trustees' Annual Report — required where accounts are filed; longer narrative under SORP 2026
Independent examination (where required) — see independent examination
Trustees approve the accounts at a minuted board meeting
File the annual return with the Charity Commission within 10 months of year end. Charitable companies and CICs also file with Companies House
Present to members at the AGM where applicable

Related guides

Sources

Charities Act 2011 — Part 8 (annual returns, accounts, audit)
Charities (Accounts and Reports) Regulations 2008 (as amended)
Charities SORP 2026 — published 31 October 2025; applies to periods beginning on or after 1 January 2026
The Charities Acts 1992 and 2011 (Substitution of Sums) Order 2026 (SI 2026/427; in force 30 September 2026)
Charity Commission CC15c Charity reporting and accounting: the essentials
OSCR Scottish Charity Accounts Regulations 2006; OSCR audit threshold rise to £1m (1 January 2026)