What changed in September 2026
New thresholds for charities in England and Wales apply to financial years ending on or after 30 September 2026. They raised the audit thresholds and the examination limits below them.
| Requirement | Before | From 30 September 2026 |
|---|---|---|
| Audit, on income alone | Income over £1m | Income over £1.5m |
| Audit, on income and assets | Income over £250,000 and gross assets over £3.26m | Income over £500,000 and gross assets over £5m |
| Examiner must be professionally qualified | Income over £250,000 | Income over £500,000 |
| Independent examination | Income over £25,000 | Income over £40,000 |
| Accruals accounts (non-company charities) | Income over £250,000 | Income over £500,000 |
Source: Charity Commission, threshold changes at a glance
Charities that still need an audit
A charity needs an audit under charity law when its gross income for the year is over £1.5 million, or when its gross income is over £500,000 and its gross assets are over £5 million. Gross assets are total assets before liabilities.
The law sets the minimum. Many governing documents and funding agreements require an audit whatever the charity's size, and a funder of a specific project may ask for an audited statement of how its money was spent. Read both before moving to an independent examination.
Want to talk it through? Tell us about the company and speak to the audit team. The budget and timetable are agreed before any work starts.
Talk to usCharitable companies
A charitable company is subject to company law and to charity law. It first checks whether the Companies Act exempts it from audit, using the company size tests (£15 million turnover, £7.5 million balance sheet total, 50 employees). If it is exempt under company law, the Charities Act thresholds then decide whether it needs an audit or an independent examination.
The new Charities SORP
A new Charities SORP (the accounting framework for charities preparing accruals accounts) applies to reporting periods beginning on or after 1 January 2026. It follows the changes made to FRS 102, including new rules on how income from contracts and leases is recognised, and changes the trustees' annual report into tiers based on the charity's income. Many charities will meet the new SORP and the new thresholds in the same year.
Choosing a charity auditor
Ask for experience of charities of a similar size and income mix. A charity auditor has to understand restricted and unrestricted funds, gift aid, grant conditions and the trustees' annual report, as well as the accounts. Ask how the firm reports to trustees and who will attend the audit committee or finance committee.
Questions
Our charity has dropped below the audit threshold. Can we stop having an audit?
Under charity law, yes, from the first financial year ending on or after 30 September 2026. Check the governing document and any funding agreements first, as many require an audit regardless of size. Trustees can also choose to keep an audit.
What is the difference between an audit and an independent examination?
An auditor gives an opinion on whether the accounts give a true and fair view. An independent examiner reports whether anything has come to their attention suggesting the records or accounts fail the legal requirements. An examination involves less work and gives a lower level of assurance.
Do the new thresholds apply in Scotland and Northern Ireland?
No. Charities registered with OSCR in Scotland or the Charity Commission for Northern Ireland follow their own regulator's thresholds.