If you are a trustee, treasurer, or finance volunteer for a charity, this is worth understanding before your next accounting year closes.

From 30 September 2026, the financial thresholds that decide how a charity prepares its accounts, and whether those accounts need an independent examination or a full audit, are increasing significantly. For a large number of charities, this means less administrative burden and lower compliance costs. The changes apply to accounting years ending on or after 30 September 2026, so if your charity's financial year ends in December or March, this is already relevant to the accounts you are working on right now.

What is actually changing

Four key thresholds are increasing:

• Independent examination required from: £25,000 income → £40,000 income
• Examination must be by a qualified examiner from: £250,000 income → £500,000 income
• Receipts and payments accounts permitted up to: £250,000 income → £500,000 income
• Statutory audit required from: £1,000,000 income (or £3.26 million assets) → £1,500,000 income (or £5 million assets)

The government estimates the audit threshold change alone will move around 2,000 charities out of the statutory audit requirement and into the lighter independent examination regime.

What is staying the same

Not everything is moving:

• Charity registration threshold: still £5,000
• Annual return required from: still £10,000
• Trustees' Annual Report and filing accounts with the Charity Commission: still £25,000

The changes are about the level of scrutiny your accounts need, not about whether you need to register or report at all.

Does this apply to every type of charity

Mostly, yes, but the practical effect depends on your charity's legal structure. Charitable Incorporated Organisations, charitable companies, and community interest companies always prepare full accruals accounts regardless of income, so the receipts and payments change will not affect them directly. It is unincorporated charities, associations, and trusts, which includes the great majority of small local charities and church PCCs, that stand to benefit most from the simpler accounts option.

What you should do before your year end

The changes apply based on when your accounting year ends, not when you get around to preparing the accounts. If your charity's year end falls on or after 30 September 2026, the new thresholds apply to you. An earlier year end still falls under the current rules.

Before that date, it is worth checking three things:

• What was your gross income for the year
• Which of the thresholds above is closest to affecting you
• Whether your current accounting approach, whether that is receipts and payments or full accruals accounts, is still the right one under the new rules

"We work with a range of charities and not-for-profit organisations, from small local causes to church PCCs, and the honest truth is most of the people managing these accounts are giving up their own time for something they care about. Anything that lifts an unnecessary burden off them is worth understanding properly."

How we can help

We already support charities and not-for-profit organisations, including a number of church PCCs, from our offices in Kenilworth and Stratford-upon-Avon, and we understand the particular pressures a small charity or church treasurer is working under. If you would like us to look at where your charity sits against the new thresholds, or simply want a plain-English second opinion before your next set of accounts, get in touch and we will talk it through.

If your charity relies on donations, it is also worth understanding how tax relief on charitable donations works alongside these changes.