The Charity Commission has confirmed that changes are coming to the income and asset thresholds that determine whether a charity needs an audit or an independent examination. These new thresholds apply to financial years starting on or after 30th September 2026.
These updates are long awaited as thresholds haven’t changed since 2015. So even if your charity isn’t affected right now, it’s worth taking a moment to understand the updates. There are also changes to reporting reqiurements which we’ll outline in a seperate post
What’s Changing?
Here’s a quick look at the old and new thresholds:
| Requirement | Current | From September 2026 |
| Audit Required if: | Income over £1 million | Income over £1.5 million |
| Income > £250k and assets > £3.26m | Income > £250k and assets > £3.26m | |
| Independent Examination | Income between £25k and £1m | Income between £40k and £1.5m |
| No external scrutiny required | Income below £25K | Income below £40K |
You can read more detail on the Charity Commission Website
Why Does It Matter?
If your charity’s income has grown over the years, as is the case for many, these new thresholds might mean you no longer need an audit
Charities with income between £1 million and £1.5 million may now choose to move to an Independent Examination, which is a simpler and less costly alternative to a full audit.
However, some charities may still choose to continue with an audit for example if required by funders or internal policy. The new thresholds don’t take that option away; it just gives trustees more discretion.
What We Think
We welcome this change as it reduces the regulatory burden for many mid-sized charities, especially those affected by inflation and growing income, but whose structure and activity don’t necessarily require an audit.
At Holy Brook, we don’t provide audit services, although we work with a number of charities who have an audit and find it helpful.
We also carry out independent examinations for a wide range of charities. For many organisations, it’s a more proportionate level of scrutiny that still meets legal and public expectations
However, in our experience, some charity clients choose to have an audit voluntarily. These changes still allow charities to opt for a full audit if trustees feel it’s appropriate for their organization’s circumstances
If you’re unsure what’s best for your charity, we’d always recommend talking it through, particularly if you’ve recently crossed an income milestone.
Good Practice: Stay informed
Even if your charity isn’t immediately affected by these changes, it’s good practice for trustees to stay informed.
Understanding the thresholds helps you:
- Plan future requirements
- Avoid last minute surprises
- Make informed decisions about scrutiny and transparency
Need Support?
We’re happy to help you navigate the thresholds and decide what kind of financial scrutiny is right for your charity.
Get in touch if you’d like to review your current reporting approach or explore whether an independent examination could work for your organisation.
