Accounts & Scrutiny
Independent Examination vs Audit Checker
The Charities Act sets clear gates. For financial years ending before 30 September 2026: independent examination once gross income passes £25,000, a qualified examiner and accruals accounts above £250,000, and a statutory audit above £1m income (or £250,000 income with assets over £3.26m). For financial years ending on or after 30 September 2026 the gates rise to £40,000, £500,000, and £1.5m income (or £500,000 income with assets over £5m). Enter your figures and financial year to see where your charity sits.
Independent Examination vs Audit Checker
The Charities Act sets clear gates. For financial years ending before 30 September 2026: independent examination once gross income passes £25,000, a qualified examiner and accruals accounts above £250,000, and a statutory audit above £1m income (or £250,000 income with assets over £3.26m). For financial years ending on or after 30 September 2026 the gates rise to £40,000, £500,000, and £1.5m income (or £500,000 income with assets over £5m). Enter your figures and financial year to see where your charity sits.
Total gross income for the financial year, before any expenditure.
The aggregate value of assets before deducting liabilities. Only relevant once income exceeds the accruals threshold (£250,000, or £500,000 for financial years ending on or after 30 September 2026).
Gross income exceeds £25,000, so independent examination is required. Below £250,000 any suitably experienced independent person can examine.
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How it works
Charity audit and independent examination thresholds explained
England and Wales charities face three levels of external scrutiny, driven mainly by gross income. For financial years ending before 30 September 2026, the Charities Act requires no external scrutiny at all up to £25,000, although trustees must still prepare accounts and, if registered, file an annual return. Once gross income exceeds £25,000, the accounts must at least be independently examined.
Independent examination is a lighter-touch review than an audit. Below £250,000 of income the examiner simply needs to be an independent person with the requisite ability and experience. Once income exceeds £250,000, two things change: the charity must prepare accruals accounts under the Charities SORP, and the independent examiner must be a member of one of the professional bodies listed in the Charities Act, such as ICAEW, ACCA or AAT. A full statutory audit by a registered auditor becomes compulsory when gross income exceeds £1m, or when income exceeds £250,000 and gross assets exceed £3.26m.
The thresholds rise on 30 September 2026, applying to financial years ending on or after that date: no external scrutiny up to £40,000, a qualified examiner and accruals accounts above £500,000, and a statutory audit above £1.5m income (or £500,000 income with gross assets over £5m). Use the financial-year toggle above to apply the right set. On top of the statutory gates, your governing document or a funding agreement can require an audit at any size, so always check both before appointing an examiner.
Scotland runs a separate regime under OSCR: every Scottish charity needs some form of external scrutiny regardless of income, and the detailed thresholds differ. This checker applies the England and Wales rules only.
Questions
Frequently asked questions
What is the charity audit threshold in England and Wales?
For financial years ending before 30 September 2026, a statutory audit is required when gross income exceeds £1m, or when gross income exceeds £250,000 and gross assets exceed £3.26m. For financial years ending on or after 30 September 2026 the audit thresholds rise to £1.5m income, or £500,000 income with gross assets over £5m. Below those levels an independent examination normally suffices, provided nothing in your governing document requires an audit.
Who can carry out an independent examination?
For charities with income at or below the qualified-examiner threshold (£250,000, rising to £500,000 for financial years ending on or after 30 September 2026), any independent person the trustees reasonably believe has the ability and experience to do it. Above that threshold, the examiner must belong to one of the bodies listed in the Charities Act, which includes ICAEW, ACCA, AAT and several others.
How are the thresholds changing on 30 September 2026?
The Department for Culture, Media and Sport has raised the scrutiny thresholds with effect from 30 September 2026, applying to financial years ending on or after that date. Independent examination is required above £40,000 gross income (previously £25,000), a qualified examiner and accruals accounts above £500,000 (previously £250,000), and a statutory audit above £1.5m income or £500,000 income with gross assets over £5m (previously £1m and £3.26m). Financial years ending before 30 September 2026 keep the old thresholds.
What is the difference between an audit and an independent examination?
An audit is a full assurance engagement carried out by a registered auditor, giving a positive opinion that the accounts are true and fair. An independent examination is a more limited review: the examiner checks the records and accounts and reports whether anything gives cause for concern. It is significantly cheaper and is what most small and medium charities need.
Can my governing document force an audit even if we are small?
Yes. If your constitution, trust deed or articles require an audit, that requirement applies regardless of the statutory thresholds, although older documents can sometimes be amended. Grant funders can also impose audit conditions in their funding agreements.
Do the same thresholds apply in Scotland?
No. Scottish charities answer to OSCR and all of them need external scrutiny of some form, however small. The thresholds that decide the form of that scrutiny also differ: for financial years beginning on or after 1 January 2026 a Scottish charity needs an audit once gross income reaches £1,000,000, or where gross assets exceed £3.26 million, and an independent examination below that. Note the mismatch in how the two regimes date their changes: the Scottish uplift applies to financial years BEGINNING on or after 1 January 2026, while the England and Wales uplift applies to accounting years ENDING on or after 30 September 2026. If your charity is registered in Scotland (or cross-border), use the OSCR guidance, not the England and Wales figures in this checker.
When do we have to prepare accruals accounts?
Non-company charities can prepare simpler receipts and payments accounts while gross income is £250,000 or below. Above that, accruals accounts following the Charities SORP are compulsory. Charitable companies must prepare accruals accounts whatever their income. For accounting periods beginning on or after 1 January 2026 the new SORP applies, with tiered reporting requirements.
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