Does my charity need an audit, an independent examination, or neither?

England and Wales: This page sets out the position in full — two gateways, tested in order. Scotland: the same idea in principle, but there is no floor below which nothing is required, the figures and the test itself work differently, and a new duty to send the examiner’s or auditor’s report to the regulator applies — see below. Northern Ireland: the same idea in principle, but again with no floor and no asset test at all, and the income trigger is the lowest of the three nations — see below.

The charity audit thresholds, tested in order

In England and Wales you test the charity audit thresholds first and the examination floor second. The order is the answer. Scotland and Northern Ireland use the same idea with different figures and no floor.

Getting it wrong has a cost. Where the scrutiny duty has not been met in time, the Charity Commission can order an audit at the trustees’ expense. This page assumes you have already worked out which accounts to prepare; the scrutiny test runs on the same gross income figure. All the figures side by side are in the charity accounting thresholds.

A statutory audit is the full external check of a charity’s accounts, done by an auditor. The law requires one once the charity passes the audit thresholds. An independent examination is the lighter external check, done by an independent examiner, for a charity below audit level. The table shows the tests in each nation, in the order the trustees apply them.

Test, in order	England and Wales	Scotland	Northern Ireland
Statutory audit on income	Gross income above £1,000,000 for financial years ending before 30 September 2026; £1,500,000 for financial years ending on or after 30 September 2026	Gross income at or above its own figure	Gross income above its own figure, the lowest of the three
Statutory audit on assets	Aggregate value of assets above £3,260,000 for financial years ending before 30 September 2026; £5,000,000 for financial years ending on or after 30 September 2026, only where gross income also exceeds £250,000 for financial years ending before 30 September 2026; £500,000 for financial years ending on or after 30 September 2026	Its own asset figure, only where accruals accounts are prepared	No asset test
Independent examination, below audit level	Gross income above £25,000 for financial years ending before 30 September 2026; £40,000 for financial years ending on or after 30 September 2026	Every charity, whatever its income	Every charity, whatever its income

In England and Wales the scrutiny question is not one test but two, run in a fixed order. Most mistakes here come from testing them out of order or on their own.

Test the audit thresholds first. A statutory audit is required if either limb is met. Income limb: gross income above £1,000,000 for financial years ending before 30 September 2026; £1,500,000 for financial years ending on or after 30 September 2026.

The asset limb looks at the aggregate value of assets at the year end, before deducting liabilities. The limb applies to assets above £3,260,000 for financial years ending before 30 September 2026; £5,000,000 for financial years ending on or after 30 September 2026, but only with a second condition. That figure is not a bare one, though almost every published summary treats it as one. Charities Act 2011 s.144(1)(b) adds a second, quieter condition.

The asset figure counts only if gross income also exceeds £250,000 for financial years ending before 30 September 2026; £500,000 for financial years ending on or after 30 September 2026. That condition moves by itself whenever the accounts threshold in s.133 moves. It is tied by a dynamic cross-reference, not changed by a direct amendment, which is why it is easy to miss.

A charity with a lot of property and modest income can be told it needs a full audit when, under the statute, it does not.

Only once audit is ruled out do you test the examination floor. The qualified-examiner threshold is £250,000 for financial years ending before 30 September 2026; £500,000 for financial years ending on or after 30 September 2026. Above that figure, the examiner must be independent and professionally qualified.

The lower bar applies between that figure and £25,000 for financial years ending before 30 September 2026; £40,000 for financial years ending on or after 30 September 2026. There, any independent person the trustees reasonably believe has the ability and practical experience will do. Statute requires no external scrutiny at or below £25,000 for financial years ending before 30 September 2026; £40,000 for financial years ending on or after 30 September 2026. See the band below before you conclude that means nothing more is owed.

One more point about the asset limb. It is measured against the balance sheet, which is not final until you build it. Take a year when the charity first recognises new leases on its balance sheet.

Gross assets can then move enough to change this answer after it looked settled. See Build your balance sheet. Be ready to revisit the answer once that step is done, not before.

Scotland and Northern Ireland: no floor, different figures and duties

Neither Scotland nor Northern Ireland has a no-scrutiny floor, and each sets its own figures. Every registered Scottish charity has its accounts examined or audited, from the first pound. Scots charity law has nothing like the England and Wales no-scrutiny band.

The audit trigger is gross income at or above £500,000 for financial years beginning before 1 January 2026; £1,000,000 for financial years beginning on or after 1 January 2026. Note the operator: “at or above”, not “above”. A charity exactly on the figure is caught in Scotland. A matching England and Wales charity on its own boundary is not.

The asset trigger is £3,260,000, unchanged by the 2026 reforms. It also works differently. The trigger applies only where the charity has prepared accruals accounts, and is not linked to income.

Below audit level, a Scottish charity needs a qualified examiner wherever it prepares accruals accounts. Again the trigger is the accounts basis chosen, not an income figure. Otherwise, any competent examiner will do.

Two more Scottish duties matter here because they attach to the scrutiny outcome, not to the accounts. A charity now has to send the examiner’s or auditor’s report to the regulator with the statement of account. The report is due on about the same timescale as the statement. The regulator must then keep the report and make it publicly available.

If a name or address in the accounts would put someone’s safety at risk, the trustees can ask the regulator to withhold it. The regulator must agree once the test is met. This mirrors the matching safeguard on the public Register itself.

Northern Ireland has no scrutiny floor either, and it goes further. It has no asset-based audit test at all. The audit trigger is gross income above £500,000, by far the lowest of the three nations’ figures.

A qualified examiner is required above £250,000. Below either figure, the trustees still choose between examination and audit. There is no third option of nothing at all.

The new band: charities that must file but are never checked

From 30 September 2026 a band exists in England and Wales that did not exist before. A charity is in this band if its gross income is:

• above the filing threshold
• at or below £25,000 for financial years ending before 30 September 2026; £40,000 for financial years ending on or after 30 September 2026

A charity in the band must send its annual report and accounts to the Commission. Yet no statute requires anyone to examine or audit them.

The band is not a drafting accident this page can resolve for you. It is a real gap between two provisions that used to share a figure and no longer do.

If your determination lands you here, the scrutiny answer is “none required”. Record that, with the reasoning, and stop. It does not mean nothing else is owed.

Filing itself still has its own deadline, and its own personal-liability consequence for missing it — see how and when to file your charity’s accounts. A CIO in this band still files whatever its income. That is the subject of its own page: The band that files accounts nobody has to check.

The single-year test, and the myth that it looks back

The audit test looks at one financial year at a time. A persistent, wrong belief is that it also looks back at the two preceding financial years. It did, once.

The repealed Charities Act 1993 used a three-year “any of” test on gross income or total expenditure. The belief has outlived the law that created it.

Charities Act 2011 s.144 has no such test. Each financial year is tested on its own. One large legacy can push a charity over the audit threshold for one year only. The charity then goes back to independent examination, with no lock-in and no smoothing.

Statute sets no point during the year when anything is owed because a crossing is expected. Nothing is triggered until the year has ended. The only hard date on the file is the Commission’s own power.

If the scrutiny duty has not been met within 10 months of the year end, the Commission may order an audit. It may do so even where none was otherwise due. The trustees are then personally, jointly and severally liable for its cost.

Auditors need lead time to plan and to check opening balances. So it is sound practice to flag a likely crossing early. That is not, itself, a legal deadline.

A charitable company: two regimes, tested in sequence

A charitable company‘s Companies Act audit exemption does not settle this question. Getting the order backwards is one of the most serious mistakes a charity can make here. Charities Act 2011 s.147(1) makes the two regimes apply in order, not as alternatives. Nothing in the Charities Act scrutiny provisions applies to a charitable company’s accounts if the Companies Act requires those accounts to be audited.

Test the Companies Act first. If a Companies Act audit is required, that is the only statutory scrutiny, full stop. If the company is exempt from a Companies Act audit, the Charities Act switches back on. Most small and medium charitable companies are exempt. The Charities Act figures in the table then decide the outcome.

This trips up experienced treasurers. A charitable company can be comfortably “small” for company-law purposes and correctly claim its Companies Act exemption. It can still need a full statutory audit under the Charities Act. Both are true at once, and the second one governs.

Northern Ireland gets the same result from its own matching provision, so the same order applies there. What the company itself files at Companies House is covered in file with Companies House.

Scotland reaches a broadly similar result by a different route. Accruals accounts trigger a qualified examiner, and a company has to prepare them in the first place. But the exact company-to-audit link has not been checked against a direct Scottish match for the England and Wales rule. Treat it as the likely position, not a confirmed one, until it has been.

Can the governing document require an audit?

Yes. An older governing document may require an audit whatever the charity’s income. That requirement binds the trustees under trust law, even where the statute would not. The statutory thresholds are not the only source of an audit requirement.

The regulator’s own published review found charities that had an independent examination where their governing document called for an audit. It found them in more than one sample.

In Scotland this is more than a constitutional matter. Each of these is a statutory audit trigger in its own right:

• a requirement in the constitution
• a requirement in another enactment
• a requirement in a decision the trustees themselves have taken

Each stands on the same footing as the income and asset tests.

Read the document before you conclude the statutory tests alone have answered the question. An audit requirement in the governing document stands until the document is changed. The route to changing it is in review and, where needed, amend your governing document.

With the scrutiny answer recorded, the next step is to determine your SORP tier. The examiner or auditor the answer calls for is appointed later: see appoint an independent examiner or appoint an auditor.

Common mistake: quoting the audit asset threshold without its income condition

The Charity Commission’s own summary table of the 2026 changes lists the income and asset figures side by side. It leaves out the income condition.

Most secondary coverage has copied it. A charity with large assets and modest income can be told it needs a full audit when, under the statute, it does not. See the asset limb in the first section. Cite the condition every time you cite the asset figure.

Common mistake: believing the audit test looks back over the two preceding years

This was true under the repealed Charities Act 1993. It has not been true since the current Act came into force. Each year is tested on its own.

Trustees who believe a bad year is smoothed away by the two before it are exposed. Trustees who think a single good year traps them for the following two are paying for scrutiny they do not need.

Common mistake: a charitable company assuming its Companies Act audit exemption settles the question

The exemption is claimed, the balance sheet says so, and the question looks closed. It is not. Being exempt from a Companies Act audit is what switches the Charities Act regime back on. A Companies House audit-exemption statement and a Charities Act audit report can rightly sit on the same accounts in the same year.

Common mistake: ignoring an audit requirement in the governing document

The statutory thresholds get all the attention. A constitutional requirement binds the trustees whether or not statute does. Older documents often use the word loosely.

The regulator has found real charities that examined where their document required an audit. Read the document. Do not assume the statutory tests are the whole answer.

Worked example

An England and Wales charity gets one large legacy. It pushes the charity’s gross income over the audit threshold for one year only. The test is applied to that year on its own.

A full statutory audit is required for the year the legacy lands. The charity goes back to independent examination the next year, with no smoothing and no lock-in. Nothing about the charity’s ordinary work changed, only where one year’s income fell.