Charity Independent Examination Threshold 2026: Does Your Charity Need an Independent Examination?
The charity independent examination threshold in England and Wales has increased from £25,000 to £40,000.
The new threshold applies to financial years ending on or after 30 September 2026. This is an important change for smaller charities, CIOs, churches and other charitable organisations, particularly those with annual income between £25,000 and £40,000.
Under the new rules, a charity with gross annual income of £40,000 or less will generally no longer be required by charity law to have its accounts independently examined, although there are important exceptions.
So, does your charity still need an independent examination in 2026?
This guide explains the new charity independent examination threshold, when it takes effect and what trustees need to consider.
What is the new charity independent examination threshold for 2026?
For financial years ending on or after 30 September 2026, the threshold at which charity accounts must normally be independently examined has increased from:
£25,000 to £40,000 of gross annual income.
This means that, subject to other requirements:
Income of £40,000 or less: normally no statutory independent examination or audit is required.
Income over £40,000 and up to £500,000: an independent examination will normally be required, unless an audit is required or chosen.
Income over £500,000 and up to £1.5 million: an independent examination may still be possible, but the independent examiner must be appropriately professionally qualified.
Income over £1.5 million: a statutory audit will normally be required.
There is also an asset-based audit test. A charity will normally require an audit where its gross income is over £500,000 and its gross assets exceed £5 million.
You can check the new thresholds directly in the Charity Commission's official guidance:
Charity Commission: Threshold changes at a glance
When does the new £40,000 independent examination threshold start?
This is one of the most important aspects of the change.
The new £40,000 threshold applies to financial years ending on or after 30 September 2026.
It does not simply apply to every charity from the beginning of the 2026 calendar year.
For example:
Charity financial year end | Independent examination threshold |
31 March 2026 | £25,000 |
30 June 2026 | £25,000 |
31 August 2026 | £25,000 |
30 September 2026 | £40,000 |
31 December 2026 | £40,000 |
31 March 2027 | £40,000 |
Therefore, if your charity has income of £35,000 and its financial year ended on 31 August 2026, it would normally still require an independent examination because the old £25,000 threshold applies.
However, if the same charity has a year end of 30 September 2026 or later, its £35,000 income would fall below the new £40,000 statutory independent examination threshold.
Does my charity need an independent examination?
For a financial year ending on or after 30 September 2026, your charity will generally need an independent examination if its gross annual income is more than £40,000, provided it does not meet the requirements for a statutory audit.
However, income is not the only consideration.
Even if your charity's income is £40,000 or less, you should check whether an independent examination or audit is required by:
the charity's governing document or constitution;
the articles of association;
a grant or funding agreement;
another regulator or governing body; or
the Charity Commission.
Trustees should therefore not automatically stop arranging an independent examination simply because the charity's income is below £40,000.
What if my charity has income between £25,000 and £40,000?
Charities with income between £25,000 and £40,000 are among those most directly affected by the new rules.
Under the previous threshold, a charity with gross annual income of £30,000 or £35,000 would normally have required an independent examination.
For financial years ending on or after 30 September 2026, a charity with gross income of £40,000 or less will generally no longer have a statutory requirement for an independent examination.
For example, a CIO with income of £38,000 and a 31 December 2026 year end would normally fall below the new independent examination threshold.
Trustees should, however, check the charity's governing document and any funding agreements before deciding that an independent examination is no longer required.
Can a charity below £40,000 still have an independent examination?
Yes.
A charity can still choose to have its accounts independently examined even when its income is below the statutory threshold.
Trustees may decide that an independent examination remains worthwhile because it provides additional assurance to:
trustees;
members;
donors and supporters;
grant-making organisations;
churches or parent organisations; and
other stakeholders.
Some grant funders may also require independently examined accounts regardless of whether charity law itself requires an examination.
What is an independent examination of charity accounts?
An independent examination is an independent review of a charity's accounts.
It is less extensive than a statutory audit and is designed to provide a proportionate level of external scrutiny for smaller charities.
The independent examiner reviews the charity's accounting records and accounts and carries out procedures required by charity law and the Charity Commission's Directions.
An independent examination should not be confused with simply preparing a charity's annual accounts.
The Charity Commission provides detailed guidance for trustees in CC31 – Independent Examination of Charity Accounts.
Does the independent examiner need to be a qualified accountant?
Not in every case.
Another significant change from 30 September 2026 is the increase in the threshold at which the independent examiner must be a member of a professional body specified under the Charities Act 2011.
Previously, this applied where gross income was over £250,000.
The new threshold is over £500,000.
Therefore, for financial years ending on or after 30 September 2026:
Income over £40,000 to £500,000
An independent examination will normally be required, but charity law does not automatically require the examiner to belong to one of the specified professional bodies. Trustees must nevertheless appoint an independent person with the appropriate ability and practical experience to carry out a competent examination.
Income over £500,000 to £1.5 million
If the charity has an independent examination, the examiner must be a member of one of the professional bodies specified under the Charities Act 2011.
The Association of Chartered Certified Accountants (ACCA) is one of the recognised professional bodies.
Has the charity audit threshold also increased?
Yes.
The main charity audit threshold has increased from £1 million to £1.5 million gross annual income for financial years ending on or after 30 September 2026.
Under the new rules, an audit will normally be required where:
Gross income is over £1.5 million
OR
Gross income is over £500,000 and gross assets exceed £5 million.
This means that some charities that previously required an audit may now be eligible for an independent examination instead.
However, trustees should check the governing document, funding arrangements and any other applicable requirements before changing from an audit to an independent examination.
What other charity accounting thresholds changed in 2026?
The independent examination threshold is part of a wider package of changes to charity accounting requirements in England and Wales.
For financial years ending on or after 30 September 2026:
Requirement | Previous threshold | New threshold |
Independent examination | Over £25,000 | Over £40,000 |
Professionally qualified independent examiner | Over £250,000 | Over £500,000 |
Accruals accounts for CIOs and unincorporated charities | Over £250,000 | Over £500,000 |
Main statutory audit threshold | Over £1 million | Over £1.5 million |
Asset-based audit test | Income over £250k + assets over £3.26m | Income over £500k + assets over £5m |
These changes are intended to make charity accounting and reporting requirements more proportionate to the size of the charity.
Frequently Asked Questions about Charity Independent Examinations
What is the independent examination threshold for charities in 2026?
For financial years ending on or after 30 September 2026, the independent examination threshold for charities in England and Wales is gross annual income over £40,000.
For financial years ending before 30 September 2026, the previous threshold of over £25,000 continues to apply.
Does a charity with exactly £40,000 income need an independent examination?
Normally, no.
For financial years ending on or after 30 September 2026, the statutory requirement generally applies where gross income is over £40,000.
However, the charity's governing document or a funding agreement may still require an independent examination.
Does a charity with £45,000 income need an independent examination?
Normally, yes.
If the financial year ends on or after 30 September 2026, gross income of £45,000 exceeds the new £40,000 threshold.
Unless an audit is required, the charity can normally have an independent examination.
Does a charity with £35,000 income need an independent examination in 2026?
It depends on the charity's financial year end.
If the year ends before 30 September 2026, the old £25,000 threshold applies, so an independent examination would normally be required.
If the year ends on or after 30 September 2026, £35,000 falls below the new £40,000 threshold, so an independent examination would normally not be required by charity law.
Do CIOs need an independent examination?
Yes. The independent examination rules apply to Charitable Incorporated Organisations (CIOs).
For financial years ending on or after 30 September 2026, a CIO with gross annual income over £40,000 will generally require an independent examination or audit, depending on its income, assets and other applicable requirements.
Do churches need an independent examination?
A church that is a registered charity may need an independent examination depending on its gross annual income, legal structure and governing document.
Church trustees should also check denominational requirements and any specific provisions in the church's governing document.
Do charitable companies need an independent examination?
Charitable companies are also subject to the revised Charity Commission thresholds, although Companies Act requirements must also be considered.
Trustees of charitable companies should therefore check both charity law and company law requirements before deciding whether an independent examination or audit is appropriate.
Can we still have an independent examination if our income is below £40,000?
Yes.
Trustees can choose to have the accounts independently examined voluntarily, and an examination may also be required by the charity's governing document or a funding agreement.
What should charity trustees do now?
Trustees should review their charity's:
financial year-end date;
gross annual income;
gross assets;
legal structure;
governing document; and
grant and funding agreements.
Particular attention should be given to charities with annual income between £25,000 and £40,000, as these charities may no longer require a statutory independent examination under the new rules.
Charities with income between £250,000 and £500,000 should also review the changes because the threshold requiring a professionally qualified independent examiner has increased.
Need an Independent Examiner for Your Charity?
Skyrock Accountants provides charity accounting and independent examination services for charities, CIOs, churches and other not-for-profit organisations.
We can assist with:
charity annual accounts;
SORP-compliant accounts;
independent examinations;
CIO accounts;
church and charity accounts;
Trustees' Annual Reports; and
advice on charity accounting and reporting requirements.
If you are unsure whether your charity needs an independent examination under the new £40,000 threshold, contact Skyrock Accountants – Chartered Accountants & Tax Advisers to discuss your charity's circumstances.
This article relates to charities in England and Wales and provides general information only. A charity's governing document, funding agreements, legal structure and individual circumstances may create additional accounting, examination
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