Charity Audit Threshold UK 2026: What Trustees Need to Know
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The charity audit threshold in the UK is one of the most searched topics among trustees and finance leads — and with good reason. Get it wrong, and your charity either bears unnecessary cost or risks being non-compliant. Get it right, and you can direct more resources where they matter most.
This guide covers the current thresholds for charities in England and Wales, the significant changes coming in October 2026, and exactly what they mean for your charity's reporting obligations.
From 1st October 2026, the charity audit threshold in England and Wales rises from £1 million to £1.5 million in annual gorss income - the first change since 2015
Why Are the Thresholds Changing?
The current thresholds were set in 2015 and have not kept pace with inflation. Over the past decade, rising income from donations, grants, and trading activity has pulled thousands of charities above the audit threshold — not because they've grown significantly in real terms, but because inflation has eroded the value of the existing limits.
Following a public consultation in 2025, the Department for Culture, Media and Sport (DCMS) confirmed a package of threshold increases designed to make charity regulation more proportionate. The changes are due to come into force on 1 October 2026, subject to a statutory instrument being laid before Parliament.
Current Charity Audit Thresholds — Until 30 September 2026
For charities registered in England and Wales, the current rules are as follows:
No external scrutiny required
Charities with gross annual income of £25,000 or below. Trustees may choose to commission an independent examination voluntarily, but are not legally required to do so.
Independent examination required
Charities with gross annual income between £25,001 and £1,000,000 (subject to the asset test below). For income above £250,000, the examiner must be a member of a recognised professional accountancy body or a Fellow of the ACIE.
Statutory audit required
Charities with gross annual income exceeding £1,000,000. Also required where gross income exceeds £250,000 and gross assets exceed £3.26 million.
New Charity Audit Thresholds — From 1 October 2026
The following thresholds will apply to charities in England and Wales from October 2026:
No external scrutiny required
Charities with gross annual income of £40,000 or below. This represents a significant uplift from the current £25,000 limit and will remove the independent examination requirement for an estimated 11,000 charities.
Independent examination required
Charities with gross annual income between £40,001 and £1,500,000. For income above £500,000 (up from £250,000), the examiner must hold a recognised professional qualification.
Statutory audit required
Charities with gross annual income exceeding £1,500,000. Also required where gross income exceeds £500,000 and gross assets exceed £5,000,000.
What Do These Changes Mean in Practice?
The impact will be felt most by three groups of charities:
Charities with income between £25,000 and £40,000
From October 2026, these charities will no longer be legally required to commission an independent examination. This is expected to save the sector around £7.8 million a year, with individual charities potentially saving between £400 and £1,500 annually.
Charities with income between £1,000,000 and £1,500,000
These charities are currently required to have a full statutory audit. From October 2026, they will be able to move to an independent examination instead — a significant reduction in both cost and administrative burden. The median audit cost for charities in this income range was close to £10,000 according to the 2024 Charity Audit Survey.
Charities with income between £250,000 and £500,000
Currently required to use a professionally qualified examiner, these charities will no longer face that requirement after October 2026. An estimated 9,000 charities are expected to benefit from this change, with projected annual sector savings of around £23 million.
Important Caveats for Trustees
The new thresholds don't automatically change your obligations on the day they come into force. There are several important points to be aware of:
- Governing document: If your constitution requires an audit regardless of income, you will still need one — even after the thresholds change
- Funder requirements: Some grant funders specifically require audited accounts. Always check your funding agreements before downgrading your scrutiny level
- Financial year timing: The new thresholds apply to financial years that begin on or after 1 October 2026 — check how this aligns with your charity's year end
- Scotland and Northern Ireland: These changes apply to England and Wales only. Separate rules apply in Scotland (regulated by OSCR) and Northern Ireland (regulated by CCNI)
- Voluntary choice: Charities may always choose a higher level of scrutiny than the law requires. Some trustees prefer audited accounts for governance or reputational reasons
The 2026 threshold changes are the most significant update to charity financial regulation since 2015 - and for many trustees, they represent a genuine opportunity to reduce costs and redirect resources to charitable activities
Should You Start Planning Now?
Yes — even though the changes don't take effect until October 2026, there are good reasons to review your position now. If your charity is currently subject to a statutory audit but your income sits between £1 million and £1.5 million, you'll want to plan the transition carefully — briefing trustees, reviewing funder agreements, and identifying a suitable independent examiner in advance.
Similarly, if your income is close to the new £40,000 threshold, you'll want to confirm whether the change applies to your current or upcoming financial year before making any decisions about external scrutiny.
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We make the process straightforward and stress-free. Get in touch today for a no-obligation quote tailored to your charity's income, accounts type, and requirements.
Frequently asked questions
Here are the questions we hear most often from charity trustees about independent examination requirements.
My charity's income is just below £25,000. Do I still need an examination?
No — charities with gross annual income of £25,000 or less are not currently required to have their accounts independently examined. However, trustees may still choose to commission one voluntarily, particularly if funders expect it or if governance best practice warrants it. From October 2026, this threshold rises to £40,000.
Can a trustee or staff member act as the independent examiner?
No. The examiner must be genuinely independent of the charity. This means they cannot be a trustee, an employee, or someone with a close personal or financial connection to the charity or its trustees. The Charity Commission takes independence very seriously and it is one of the key requirements set out in CC32.
How much does a charity independent examination typically cost?
Costs vary depending on the complexity and size of the charity. Government consultation responses cited typical costs ranging from around £475 to £1,500 for smaller charities. For larger charities approaching the audit threshold, fees may be higher. Some charities are able to source pro bono examiners, though availability varies by region.
When do the new charity financial thresholds come into effect?
The new thresholds are intended to come into force on 1st October 2026, subject to a statutory instrument being laid before Parliament. The independent examination threshold rises from £25,000 to £40,000, the qualified examiner threshold from £250,000 to £500,000, and the audit threshold from £1 million to £1.5 million.
Does an independent examination apply to excepted charities?
Yes. The independent examination rules also apply to excepted charities — those regulated by the Charity Commission but not required to formally register with it. They do not apply to exempt charities, such as most universities in England, academy trusts, and certain national museums.
