Audit and independent examination threshold updates

The threshold at which a charity must be audited or procure an independent examination is changing in England and Wales. Whether or not a charity requires an audit will depend mainly upon how much income is received or generated and their year end. The income limit varies according to the type of charity as follows.

For periods ending after 30 September 2026:
● all charities where income exceeds £1,500,000 in a financial year require an audit (for periods ending on or before 30 September 2026: £1,000,000)
● charities (both incorporated and unincorporated) require an independent examination where their income falls between £40,000 and £1,500,000 in their financial year (for periods ending on or before 30 September 2026: £25,000 to £1,000,000)
● where income is over £500,000 the independent examiner must be suitably qualified (for periods ending on or before 30 September 2026: £250,000).

For charities with assets above £5m, the income threshold from 1 October 2026 onwards will be £1m (rising from £3.26m and £500k respectively for periods finishing on or before 30 September 2026).

Find out more about new charity financial thresholds and what accountants need to know.

Meanwhile, in Scotland, the income threshold over which an audit is required has already risen from £500k to £1m. However, the relevant assets threshold remains at £3.26m Scottish charities with assets above this level must procure an audit, regardless of their income. However, there are currently no plans to revise the equivalent thresholds in Northern Ireland.

ICAS hails Scottish charity audit threshold increase as a “significant and positive step”.

Find out more about Charities (Amendment) Bill consultation.

If you have any questions, then please feel free to get in touch with Michaela Johns on 023 8046 1256 or email Michaela Johns.