Charity Accounts Thresholds 2026: Independent Examination, Audit and Reporting

The charity accounting thresholds changed for financial years ending on or after 30 September 2026. Several of them moved substantially, and a charity that was required to have its accounts independently examined last year may not be this year.

Most guidance circulating online still shows the old figures. This guide sets out both sets side by side, from the Charity Commission's own threshold table, so you can see which one applies to the year you are preparing. It applies to England and Wales.

The thresholds, old and new

The financial year end decides which column applies. A year ending 31 March 2026 uses the old thresholds; a year ending 31 December 2026 uses the new ones.

Two things are worth noticing. The reporting thresholds did not move — annual returns still start at £10,000 and the Trustees' Annual Report still at £25,000. Everything that moved is on the scrutiny side: examination, accruals and audit.

What this changes in practice

Small charities between £25,000 and £40,000

This is the group most affected. A charity in this band previously needed an independent examination and now does not, unless its governing document requires one. Check the governing document before standing the examiner down — the Commission's exemption is explicitly subject to it.

Charities between £250,000 and £500,000

Two changes land together here. These charities can now use receipts and payments accounts if they are unincorporated or a CIO, rather than being forced onto accruals accounting. And where an examination is required, it no longer has to be carried out by a professionally qualified examiner.

That is a meaningful reduction in cost and complexity for a band that includes a large number of established local charities. It is also a decision rather than an obligation: accruals accounts give a truer picture of a charity's position, and many will choose to keep preparing them.

Charities around the audit threshold

The income audit threshold moved from £1m to £1.5m, and the combined test from £250,000 income with £3.26m assets to £500,000 income with £5m assets. A charity sitting between those points may move from audit to independent examination.

Both audit tests still have to be checked. A charity with £600,000 income and £6m of assets is caught by the assets test even though it is well under the £1.5m income threshold.

The annual return tiers

Separately from the accounts, what a registered charity in England and Wales submits to the Commission depends on income:

• Income under £10,000: report income and spending only.
• Income between £10,000 and £25,000: answer the questions in an annual return.
• Income over £25,000: annual return, plus copies of the Trustees' Annual Report, the accounts, and the independent examiner's or auditor's report where one is required. Charities over £25,000 must also declare that there are no serious incidents they have failed to report.

That last declaration is easy to overlook and it is a positive statement, not a formality.

Independent examination is not a soft audit

An independent examination is a different engagement from an audit, with a different scope and a different report. It is not a cheaper audit, and describing it to trustees as one creates expectations the examiner cannot meet.

Where the charity is above the qualified-examiner threshold, the examiner must hold an appropriate professional qualification. Below it, the requirement is independence and sufficient ability, which places the judgement about competence on the trustees.

For the audit side of the work, our guide to auditing not-for-profit organisations covers how these engagements differ in practice from a commercial audit.

Why this matters for practices and finance teams

Charity work is a defined specialism and the threshold change creates a round of client conversations that will not happen on their own. Every client whose year end falls on or after 30 September 2026 needs their requirement re-tested, and some will be paying for scrutiny they no longer need.

It also cuts the other way. A charity that drops out of examination entirely loses an external check on its figures, and trustees remain responsible for the accounts either way. The saving is real; so is the loss of a second pair of eyes.

If you are considering this as a specialism, see our guide to a career in charity and not-for-profit accounting, and our overview of CPD for charity and not-for-profit finance professionals.

Checking which thresholds apply

The test is the financial year end, not the date you prepare the accounts. For a charity with a 30 September 2026 year end, the new thresholds apply. For 29 September 2026, the old ones do. Where a charity is close to a threshold in either direction, confirm the figure against the Charity Commission's current guidance rather than a summary, including this one.