Every charity on the Scottish Charity Register, including charitable companies and charities based elsewhere in the UK that are registered in Scotland, must prepare a statement of account under section 44 of the Charities and Trustee Investment (Scotland) Act 2005 and the Charities Accounts (Scotland) Regulations 2006. Unlike England and Wales, there is no income level below which accounts escape scrutiny: every charity needs an independent examination or audit, and the accounts and the independent report on them must reach OSCR within nine months of the year end.

Which law governs Scottish charity accounts?

Section 44(1) of the 2005 Act requires a charity to keep proper accounting records, prepare a statement of account for each financial year including a report on its activities, have that statement independently examined or audited, have the examiner or auditor make an independent report on accounts, and send both to the Office of the Scottish Charity Regulator (OSCR). Section 44(2) requires the records to be kept for six years from the end of the financial year to which they relate.

The detail sits in the 2006 Regulations, which have been amended several times, most recently by the Charities Accounts (Scotland) Amendment Regulations 2025. ICAS points out that in Scotland all charities, including charitable companies, must apply the accounts preparation requirements of the 2006 Regulations. A charitable company therefore meets the Companies Act and the Scottish regulations at the same time. Universities, colleges and registered social landlords are special case charities under regulation 14 and follow their own sector SORPs instead.

For financial years beginning on or after 1 January 2026, the 2025 Regulations update the definition of “the SORP” to the Charities SORP issued in October 2025, so accruals accounts follow SORP 2026; see the Charities SORP explained.

Receipts and payments or fully accrued accounts?

The choice is set by gross income, which regulation 1 defines as total recorded income in all unrestricted and restricted funds, excluding resources received as capital funds.

  • Gross income under £250,000: regulation 9 allows a receipts and payments account, a statement of balances at the year end, notes, and an annual report containing the information in Schedule 2. Under regulation 9(4), accruals accounts are needed instead if the constitution, another enactment or a decision of the trustees requires them.
  • Gross income of £250,000 or more: regulation 8 requires fully accrued accounts made up of a statement of financial activities, a balance sheet, a cash flow statement if appropriate, notes and an annual report.

In both cases one trustee signs the statement of balances or balance sheet and the annual report on behalf of all the trustees, stating the date the accounts were approved. Scotland’s £250,000 limit is half the £500,000 now allowed for non company charities in England and Wales, and the Charity Commission’s completion notes for its receipts and payments template (CC16) say that pro forma is not suitable for filing with OSCR, although the Commission will accept accounts laid out in OSCR’s format. The English rules are covered in receipts and payments accounts.

When is an audit needed instead of an examination?

Regulation 10 requires an audit where a charity preparing accruals accounts has gross income of £1 million or more, or gross assets before liabilities above £3.26 million at the year end. It also applies where the constitution, another enactment or a trustee decision requires an audit, and to consolidated accounts. The auditor must be eligible to act under section 1212 of the Companies Act 2006 or be the Auditor General for Scotland.

The £1 million figure applies to financial years beginning on or after 1 January 2026. For earlier years it was £500,000. The 2025 Regulations raised the threshold for consolidated accounts under regulation 6 by the same amount from the same date.

Every charity that does not need an audit must be independently examined under regulation 11, however small its income. The examiner must be someone the trustees reasonably believe has the ability and practical experience to do the work. Where the charity prepares accruals accounts, the examiner must also be a member of one of the bodies listed in regulation 11(2), such as ICAEW, ICAS, ACCA, AAT, CIMA or CIPFA, a full member of the Association of Charity Independent Examiners, or the Auditor General for Scotland. There is no qualification requirement where receipts and payments accounts are prepared.

What is the independent report on accounts?

The Charities (Regulation and Administration) (Scotland) Act 2023 inserted section 44(1)(ca) into the 2005 Act from 5 March 2026, giving the auditor’s or examiner’s report a statutory name and requiring a copy to be sent to OSCR with the accounts. For an examination, regulation 11(3) sets the content. The report must identify the examiner and any professional body, be dated and signed, and say whether anything has come to the examiner’s attention giving reasonable cause to believe that, in any material respect:

  • accounting records were not kept as section 44(1)(a) and regulation 4 require;
  • the accounts do not accord with those records; or
  • the accounts do not comply with regulation 8 or regulation 9, as the case may be.

It must also report any material expenditure or action that appears not to be in line with the charity’s purposes, any failure to give information or explanations, and any material inconsistency between the accounts and the trustees’ annual report.

How and when are accounts filed with OSCR?

Regulation 5 requires the statement of account and the independent report on accounts to be sent to OSCR not more than nine months after the end of the financial year. A charity removed from the Register must send them within nine months of removal. Charitable companies also file with Companies House under company law; see Companies House accounts deadlines and penalties.

Section 45B of the 2005 Act, inserted by the 2023 Act, requires OSCR to keep each set of accounts and independent report for at least five years from the end of the financial year and make them available for public inspection. Regulation 15, added by the 2025 Regulations, means a charity need not include information excluded from its Register entry on safety grounds. A charity can also apply to OSCR for a safety and security dispensation to leave out a person’s name and address, or the address of premises, where inclusion would be likely to jeopardise anyone’s safety or security.

What happens if a charity does not file?

OSCR has two statutory tools. Under section 45 it can appoint a suitably qualified person to prepare the overdue statement of account, and the trustees are personally liable, jointly and severally, for OSCR’s costs and the appointed person’s expenses. Under section 45A, inserted from 1 April 2024, if the accounts are overdue and the charity has not responded to OSCR, OSCR can give notice of its intention to remove the charity from the Register. Unless the charity makes contact within three months, OSCR can remove it, and it must publish a list of charities that have been given such notices. For a SCIO, removal means dissolution followed by removal.

How do groups, connected charities and cross border charities work?

Under regulation 6, a parent charity whose combined gross income with its subsidiaries, after removing intra group transactions, is £1 million or more must prepare consolidated accounts following the SORP. Under regulation 7, connected charities with common purposes or common control may file a single collated document, prepared and scrutinised under the rules for the charity with the highest gross income. Charity Commission guidance tells charitable companies registered in England and Wales that also operate in Scotland to follow the Scottish accounting rules as well. The thresholds in all three jurisdictions are compared in charity accounts thresholds.

How does this work in practice?

Illustration only. A SCIO running a community sports club has a 31 March year end and gross income of £180,000 for the year to 31 March 2027.

  • Income is under £250,000, so it may prepare receipts and payments accounts unless its constitution requires accruals accounts.
  • It still needs an independent examination. Because it prepares receipts and payments accounts, the examiner does not have to hold a listed qualification.
  • The accounts and the examiner’s independent report must reach OSCR by 31 December 2027.

If the same SCIO received a £900,000 legacy and its income rose to £1.08 million in that year, it would need accruals accounts and, because the year began after 1 January 2026 and income is over £1 million, a full audit.

What mistakes come up most often?

  • Assuming a small Scottish charity needs no examination because an English charity of the same size would not.
  • Using an unqualified examiner for accruals accounts.
  • Applying the £1 million audit threshold to a year that began before 1 January 2026.
  • Sending the accounts without the independent report on accounts, which section 44(1)(d) now requires.
  • Treating capital funds received as income and pushing the charity over the £250,000 or £1 million line.
  • A charitable company relying on its Companies Act audit exemption and forgetting it still needs a Scottish examination.

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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.