Charity regulation is complex. Establishing whether a charity requires an audit or independent examination can be confusing, so this is worth another look at here.
Firstly, it is always worth a review of a charity’s governing document. This document may require an audit irrespective of any thresholds.
Secondly, thresholds are different depending on whether a charity is registered in England and Wales or Scotland.
In England and Wales the thresholds are as follows:
- If a charity has gross income of £25,000 or more, an independent examination is required by an independent person who the trustees consider to have the ability to competently carry out the review.
- If a charity has gross income greater than £250,000 but less than £1mn then the independent examination must be carried out by a member of an eligible accounting body such as ICAEW or ACCA or by Fellows of the Association of Charity Independent Examiners.
- If gross income for the year is greater than £1 million, or gross assets are more than £3.26 million and income of more than £250,000, then an audit is required.
- The total exemption threshold is gross income less than £25,000.
Please note the thresholds in Scotland are different to those noted above.
The thresholds are complicated and can cause confusion, especially when gross income requires detailed assessment.