Do we need an examination if we are under the threshold?

Applies in: England and Wales only

The band described here cannot arise in Scotland or Northern Ireland, and the reason it cannot is the most useful thing on this page for a charity registered there.

The band cannot exist in Scotland or Northern Ireland, because neither nation’s law has a scrutiny floor at any income. Charities regulated by OSCR or the Charity Commission for Northern Ireland are examined or audited at every income level.

How did the gap open?

The independent examination threshold rose and the filing threshold did not. So two provisions that trustees used to read as one figure moved apart.

Section 145(1) rose. At or below a set income, no external scrutiny is required. That income is now £25,000 for financial years ending before 30 September 2026; £40,000 for financial years ending on or after 30 September 2026. Both values are live. Your own year end picks one, under 30 September 2026.

Section 163 did not. Above a set gross income, the trustees must send the annual report and accounts to the Commission. That figure was left where it was. legislation.gov.uk confirms there are no known outstanding effects for s.163. The figure itself is unchanged. It is listed with the others on the charity accounting thresholds page.

The space between the two is the band.

The Government explained why, on the record. The reason tells you how long this is likely to last:

“The government proposes to retain this threshold … at this point in time. In order to change this threshold, the Charity Commission’s systems would require significant updates, which could not be completed by October 2026 … However, we will keep this threshold under review, noting the desirability of aligning with other accounting and reporting thresholds in future.”

— Consultation on financial thresholds in charity law: government response

The mismatch comes from a limit in the regulator’s IT systems. It is not a policy decision that unchecked accounts are acceptable. The department has said it intends to revisit it. This band should be treated as temporary. That is why this page has a short review interval.

What you still have to do

Being in the band removes the scrutiny duty. It removes nothing else.

• You still file, and the deadline is unchanged — 10 months from your financial year end. It is counted from the year end, not from the date the trustees approved the accounts. Late approval does not move it.
• Failing to file is a criminal offence committed by each trustee individually, not by the charity. A trustee has a defence if they took all reasonable steps. The Commission is not seen to prosecute, but the offence is real. It attaches to people, not to the organisation.
• You still prepare proper accounts. Nothing in the scrutiny provisions touches the duty to keep accounting records or to prepare accounts in the required form.
• You may still owe an annual return, which is a separate filing with its own floor and its own override.
• Your governing document may require an audit anyway. If it does, it binds the trustees whether or not statute does. Read it before you conclude you need nothing (see map your governing document).

Do charities under the filing threshold still have to file?

Yes, they can still have to file, if the Commission asks. The belief that “under the threshold you don’t have to file” is the other half of the confusion. It is published almost everywhere.

Section 163(2) does not exempt small charities from filing. It turns the duty into one that applies on request, on a sliding deadline. Below the trigger, you must send the report and accounts if the Commission asks. The deadline then depends on when the request arrives:

• a request arriving before the end of the seventh month: the ordinary period from your financial year end
• a request arriving later: three months from the date of the request

The result is not what you would expect. A late request can give a small charity a deadline that falls later than the deadline a larger charity gets automatically. Almost nobody publishes this. So small charities either believe they are exempt and are not, or believe they have missed something and have not.

A CIO files whatever its income. Two separate overrides in two different sections make this so: one for the annual report, one for the annual return. Both sit in brackets and both are easy to miss.

A CIO with a few hundred pounds of income owes both filings. So a CIO inside this band files accounts that nobody has to check.

Choosing an examination anyway

Inside the band, no statute requires an independent examination or an audit. Three things follow.

You are not doing anything wrong by not commissioning one. A funder, a bank or an adviser may tell you the accounts must be examined. If so, ask which provision they are relying on. For a charity in this band, for a year ending on or after the effective date, there is not one.

The Commission can still order an audit. It may do so where the scrutiny duty applies and has not been met within the statutory period after the year end. It may order one even where no statutory audit was due.

Where it does, the trustees are personally, jointly and severally liable for the cost. That power does not vanish because your income is below a threshold.

An examination is still a reasonable thing to buy. The Commission’s own monitoring found materially different accounts quality between charities examined by professionally qualified examiners and those examined by unqualified ones. The review behind this is dated: it looked at 2017 accounts.

The same 2026 package raised the qualified-examiner threshold, £250,000 for financial years ending before 30 September 2026; £500,000 for financial years ending on or after 30 September 2026. That moves a band of charities from the group with the higher pass rate into the one with the lower. If funders will read your accounts, an examination usually costs less than the argument it saves you.

Why this cannot happen in Scotland or Northern Ireland

The band is a product of a scrutiny floor. Neither of the other two jurisdictions has one.

• Scotland — every registered Scottish charity has its accounts examined or audited, at every income level, from the first pound. And there is no income floor for annual reporting either. Every registered Scottish charity files everything, every year, including dormant ones.
• Northern Ireland — the accounts must be either examined or audited, as the trustees choose, at every income level.

This is where “England relaxed its charity rules” stops being a useful summary of 2026. Two of the three UK nations require something of every charity at every income. The change widened that gap. A charity registered in more than one jurisdiction cannot use the England and Wales position anywhere else.

What to do about it

• Step 13 — Determine what external scrutiny you need. Do this for the specific financial year. Record the income figure you tested and the conclusion, and keep the record. If the answer is “none”, the record is what makes that a decision rather than an omission.
• Reporting, Step 14 — File your accounts and annual report with the regulator, within the deadline, and keep the submission reference. It is your only proof that you filed on time if anyone disputes it.

If you are not sure which side of the transition your year end falls on, read The 2026 threshold changes first.

This is information, not legal advice. If the Commission has already written to you about a missing filing, that is the point at which to ask for help — the Commission answers questions free, and LawWorks and Advocate provide free legal help to charities.