Charities across England, Wales and Scotland are facing important changes to financial reporting thresholds — and trustees should be preparing now.
The updated thresholds affect how charities register, prepare accounts, file information and meet scrutiny requirements. While the day-to-day work of many charities may not change, the administrative obligations sitting behind them could.
For trustees, finance teams and charity leaders, understanding where an organisation sits within the new income bands will be essential.
For charities in England and Wales, the new financial thresholds will apply to accounting years ending on or after September 30, 2026. In Scotland, the changes apply to accounts with financial years commencing after January 1, 2026. That means organisations should review their current income levels, accounting basis and reporting processes well in advance.
One of the key distinctions remains the level of gross income.
Charities with income below £5,000 may have fewer formal filing and scrutiny requirements, although accounts and trustees’ reports must still be prepared and made available if requested.
However, once income rises above £5,000, registration requirements begin to apply for many charity structures, including charitable companies and unincorporated charities.
Charitable Incorporated Organisations and Scottish charities have specific registration obligations, with all Scottish charities required to register with the Office of the Scottish Charity Regulator, regardless of income.
The accounting basis also changes as charities grow. All charitable companies must prepare accounts on an accruals basis at every income level.
For unincorporated charities, CIOs and Unincorporated Scottish charities, receipts and payments accounting may be available at lower income levels, but accruals accounting becomes necessary as income increases, particularly from the £500,000 to £1.5m bracket upwards.
Scrutiny requirements are another important consideration. For many charities, no mandatory external scrutiny applies at the lowest levels, but independent examination becomes necessary once income reaches higher thresholds.
Where gross income exceeds £500,000, that independent examination must be carried out by someone who is a member of a body specified under the Charities Act, such as a qualified accountant.
Audit requirements apply at the highest income levels, including where income exceeds £1.5m, or £500,000 where gross assets exceed £5m.
For Scottish charities, audit requirements apply at more than £1m, or where gross assets meet the relevant threshold.
Prepare now
My message to trustees is clear: do not wait until the year-end process begins.
Charities should check which income band they fall into, review whether their accounting basis remains appropriate, and confirm whether independent examination or audit requirements will apply.
Groups should also be aware that group accounts will need to be prepared where charitable groups fall into the highest income category.
With careful planning, these changes need not become a burden. Instead, they offer charities an opportunity to strengthen governance, improve financial transparency and ensure they remain fully compliant as reporting expectations evolve.
The changing thresholds for charities was the discussion of the latest webinar from Saint & Co, hosted by Sophie Graham and Clare Garrison. A recording of the webinar can be viewed at Chartered Accountants for Charities | Carlisle.
Any charities requiring assistance can contact advice@saint.co.uk.
