Whether a UK charity needs an audit, an independent examination or no external scrutiny at all depends on its gross income, sometimes its gross assets, and which of the three UK charity law jurisdictions it is in. In England and Wales, for years ending on or after 30 September 2026, scrutiny starts above £40,000 of income and audit becomes compulsory above £1.5 million. Scotland and Northern Ireland have no lower limit at all: every charity there needs at least an independent examination.

What are the thresholds in each part of the UK?

Each jurisdiction sets its own figures in its own legislation: the Charities Act 2011 for England and Wales, the Charities and Trustee Investment (Scotland) Act 2005 and the Charities Accounts (Scotland) Regulations 2006 for Scotland, and the Charities Act (Northern Ireland) 2008 for Northern Ireland. The table summarises the current position.

Test England and Wales Scotland Northern Ireland
No external scrutiny needed Income £40,000 or less Never; every charity is examined or audited Never; every charity is examined or audited
Receipts and payments accounts allowed (non company charities) Income up to £500,000 Income under £250,000 Income up to £250,000
Examiner must hold a listed qualification Income over £500,000 Whenever accruals accounts are prepared Income over £250,000
Audit compulsory on income Income over £1.5 million Income of £1 million or more Income over £500,000
Audit compulsory on assets Income over £500,000 and gross assets over £5 million Accruals accounts and gross assets over £3.26 million No separate asset test in the Act
Group accounts compulsory Group income over £1.5 million Group income of £1 million or more See Schedule 6 to the 2008 Act

The detail of each test, and the old figures that still apply to earlier years, are in our guides to independent examination of charity accounts and Scottish charity accounts and OSCR.

Which year do the new figures apply to?

The two recent increases are switched on by different dates, which is the most common source of error.

  • England and Wales: the Charities Acts 1992 and 2011 (Substitution of Sums) Order 2026 came into force on 30 September 2026, and article 5(6) says the new sums do not apply to any financial year ending before that date. The test is the year end.
  • Scotland: the Charities Accounts (Scotland) Amendment Regulations 2025 raised the audit and group accounts income thresholds from £500,000 to £1 million, but regulation 2 says the change does not apply to accounts for a financial year beginning before 1 January 2026. The test is the year start.

So a charity with a 31 December 2026 year end gets the new figures in both jurisdictions, but one with a 30 September 2026 year end gets the new England and Wales figures and the old Scottish ones. The Charities SORP 2026 also applies by start date, to periods beginning on or after 1 January 2026.

How is gross income measured for these tests?

For a charity preparing accruals accounts in England and Wales, Charity Commission guidance says gross income is total income in the Statement of Financial Activities for all funds, excluding receipts of endowment funds but including endowment converted to income and available to spend. The Scottish regulations define gross income as total recorded income in all unrestricted and restricted funds, not including resources received as capital funds.

The asset test in section 144(1)(b) of the Charities Act 2011 uses the aggregate value of assets before deducting liabilities at the end of the year, and it only applies once income also exceeds the section 133 accounts threshold. Scotland’s asset test in regulation 10 likewise uses assets before liabilities, but applies to any charity preparing fully accrued accounts.

Each year is tested on its own figures. There is no rule like the company law requirement to meet a test in two consecutive years, so a single large legacy can trigger an audit for one year only.

How do charitable companies fit in?

A charitable company is tested twice. Section 147 of the Charities Act 2011 says the charity law audit rules do not apply if the company’s accounts must be audited under Part 16 of the Companies Act 2006. If the company is exempt from a Companies Act audit, the charity thresholds still apply. Charity Commission guidance says a charitable company that needs a charity law audit but not a Companies Act audit must still include the audit exemption statement on its balance sheet. Our guide to audit exemption for small companies covers the company size tests.

A charitable company can never prepare receipts and payments accounts: section 135 disapplies sections 130 to 134 for charitable companies, and the Commission’s guidance says all charitable companies must prepare accruals accounts. In Scotland, ICAS notes that all charities, including charitable companies, must follow the 2006 Regulations, so a Scottish charitable company below the Companies Act audit threshold still needs an examination or audit under those Regulations.

What about groups with trading subsidiaries?

In England and Wales, a parent charity must prepare group accounts under section 138 unless the group’s aggregate gross income is within the limit set by regulations, now £1.5 million for years ending on or after 30 September 2026. Section 151 then requires those group accounts to be audited where the group exceeds the relevant income threshold, and the parent’s own accounts are pulled into audit too. A parent required to prepare group accounts also loses the receipts and payments option, whatever its own income.

In Scotland, regulation 6 requires consolidated accounts where combined gross income, after removing intra group transactions, is £1 million or more for years beginning on or after 1 January 2026, and regulation 10(1A) requires those consolidated accounts to be audited.

Which lower filing thresholds apply in England and Wales?

Separate, older figures govern what goes to the Charity Commission, and the 2026 Order did not change them:

  • Section 169: a registered charity must prepare an annual return unless gross income is £10,000 or less, but a CIO must always do so.
  • Section 163: the trustees’ annual report must be sent to the Commission within 10 months of the year end where gross income exceeds £25,000, and by a CIO whatever its income. Section 164 requires the accounts and the auditor’s or examiner’s report to go with it.

A charity with income of £30,000 therefore needs no examination for a year ending after 30 September 2026, yet must still file its report and accounts with the Commission.

How does one charity come out in each jurisdiction?

Illustration only. An unincorporated charity has gross income of £800,000, gross assets of £2 million and a year ending 31 December 2026.

  • England and Wales: income is above £500,000, so accruals accounts are required and any examiner must be qualified. Income is below £1.5 million and assets below £5 million, so an independent examination is allowed.
  • Scotland: the year began on 1 January 2026, so the £1 million audit threshold applies. Income is below it and assets are below £3.26 million, so a qualified independent examiner can act.
  • Northern Ireland: income exceeds £500,000, so section 65 of the 2008 Act requires an audit.

The same charity with a year ending 30 September 2026 would also need an audit in Scotland, because that year began before 1 January 2026 and the old £500,000 threshold still applies.

What mistakes come up most often?

  • Using the England and Wales year end rule for a Scottish year, or the other way round.
  • Assuming a tiny Scottish or Northern Irish charity needs no examination because it would not need one in England.
  • Counting endowment receipts, or capital funds in Scotland, as income and tipping a charity into audit.
  • Ignoring the asset test because income alone is below the audit threshold.
  • Forgetting that a charity registered with the Charity Commission that also operates in Scotland must meet the Scottish rules as well; Commission guidance for charitable companies flags this.
  • Overlooking a governing document or funding agreement that requires an audit regardless of size; see the Charities SORP explained for what accruals accounts must contain.

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Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 8 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.