Charity Accounting Thresholds are Changing: What your Organisation Needs to Know

From 30 September 2026, several important financial reporting thresholds for charities will increase. While these changes won't affect every organisation, they could reduce administrative requirements for many charities and community groups across the North East. 

The new thresholds apply to independent examinations, audits, receipts and payments accounts, and group accounts. 

One of the biggest changes is that charities will only need an independent examination if their annual income exceeds £40,000, up from the current threshold of £25,000. This means some smaller charities that currently require an independent examination may no longer need one. 

For charities that require an independent examination, the threshold at which the examiner must hold a recognised professional qualification is also increasing, from £250,000 to £500,000 annual income. 

There is good news for non-company charities too. Organisations with an income below £500,000 will be able to prepare receipts and payments accounts rather than accruals accounts, compared with the current threshold of £250,000. This could simplify financial reporting for some charities. 

The audit thresholds are also changing. Currently, charities require an audit if their income exceeds £1 million and their assets exceed £3.26 million. From 30 September 2026, these thresholds will increase to £1.5 million income and £5 million in assets. 

For charities with subsidiary organisations, the threshold for preparing and auditing group accounts will rise from an aggregate group income of £1 million to £1.5 million. 

These changes are intended to reduce administrative burdens and better reflect the size and resources of modern charities. However, it's important to remember that trustees remain responsible for ensuring appropriate financial oversight and compliance, regardless of whether specific reporting requirements apply. 

What should your organisation do now? 

• Review your most recent annual income and asset figures. 
• Consider whether your current reporting requirements may change after 30 September 2026. 
• Speak to your independent examiner, auditor or finance adviser if you're unsure how the new thresholds affect you. 
• Make sure trustees understand any changes to their financial responsibilities. 

For many VCSE organisations, the changes could mean less time spent on compliance and more time focused on delivering services and supporting communities. Taking a little time now to understand the new rules will help ensure a smooth transition when the changes come into effect. 

Need support? Our Business Services team provides independent examination services for charities and community organisations across the North East. Whether you're preparing for year-end, reviewing your reporting requirements, or looking for practical advice on charity finance, our experienced team can help you stay compliant and give trustees confidence in their financial procedures.