Charity Independent Examination: What It Is and When You Need One
Most small UK charities are required to have their accounts externally scrutinised, but not necessarily audited. The requirement that applies to the majority is independent examination — a lighter-touch process that is less expensive than a full audit but still provides the Charity Commission with independent assurance that accounts are properly prepared.
Understanding which requirement applies to your charity, and who qualifies as an examiner, is an annual governance task. It matters because the thresholds changed for financial years ending on or after 30 September 2026 — while a charity whose year ended before that date is still on the old figures for that year — and because choosing the wrong type of scrutiny — or failing to arrange any — is a regulatory compliance failure.
The three levels of scrutiny
The Charity Commission's guidance sets out three levels, based on gross annual income. CC31 gives the figures for financial years ending before 30 September 2026; the Commission's page on the changes gives the figures for years ending on or after that date:
| Gross income | External scrutiny required |
|---|---|
| £25,000 or less (£40,000 or less for financial years ending on or after 30 September 2026) | None required (good practice to have accounts checked) |
| More than £25,000, up to £1,000,000 (more than £40,000, up to £1,500,000 for financial years ending on or after 30 September 2026) | Independent examination (unless income also exceeds £250,000 and gross assets exceed £3.26m — both limbs together; for financial years ending on or after 30 September 2026 those two figures become £500,000 and £5m) |
| More than £1,000,000 (or income >£250,000 with assets >£3.26m) — for financial years ending on or after 30 September 2026, more than £1,500,000 (or income >£500,000 with assets >£5m) | Full audit by a registered auditor |
Trustees can always choose a full audit even when independent examination is the minimum requirement — some charities do this to satisfy funders or lenders.
The change for financial years ending on or after 30 September 2026: SI 2026/427, which came into force on 30 September 2026, made two substitutions in Charities Act 2011 s.145 — the independent examination threshold rose from £25,000 to £40,000 (s.145(1)), and the income level above which the examiner must be a qualified member of a listed body rose from £250,000 to £500,000 (s.145(3)). Art.3(4) separately raised the audit threshold from £1,000,000 to £1,500,000 and the gross-assets limb of the audit test from £3.26m to £5m (s.144), and art.3(3) raised the s.133 accounts threshold — the "accounts threshold" that the income leg of the asset test is measured against — from £250,000 to £500,000. These changes apply to a charity's financial year ending on or after 30 September 2026 — a charity whose year ended before that date still uses the previous thresholds for that year, even when it prepares the accounts after 30 September 2026. Confirm which threshold applies to your specific accounting period before relying on the new figures.
What independent examination is
The Charity Commission describes it as "a 'light touch' scrutiny involving the examiner checking for specific matters only." The examiner does not assess whether accounts give a "true and fair view" as an auditor does. Instead, the examiner:
- Checks that accounting records have been kept and match the accounts prepared
- Looks for unusual items or areas that might need further explanation
- Identifies any matters that need to be reported to the Commission
An independent examination is not an audit and should not be described as one. If your accounts say "independently examined," that is accurate. "Independently audited" is not accurate and should be corrected.
Who can be the independent examiner?
For charities with gross income up to £250,000 — up to £500,000 for financial years ending on or after 30 September 2026 — the examiner must be "an independent person who is reasonably believed by the trustees to have the requisite ability and practical experience to carry out a competent examination of the accounts" — the standard set in the Charities Act 2011. This means a suitably experienced individual, often a local accountant, retired finance professional, or another charity's treasurer, who has no connection to the charity. Trustees, staff, and close family members of trustees cannot serve as the examiner.
For charities with gross income between £250,000 and £1,000,000 — between £500,000 and £1,500,000 for financial years ending on or after 30 September 2026 — the examiner must be a member of one of the accountancy bodies listed in the Charities Act 2011 (s.145(4) lists ICAEW, ICAS, ICAI, ACCA, CIPFA, CIMA and others) or a Fellow of the Association of Charity Independent Examiners. The trigger is gross income alone — s.145(3), as amended, applies "if ... the charity's gross income in that year exceeds £500,000" — and has nothing to do with whether you prepare receipts and payments or accruals accounts. That £500,000 applies to financial years ending on or after 30 September 2026; for a financial year ending before that date the figure is still £250,000 (SI 2026/427 art.3(5) substituted £500,000 for £250,000, and art.5(6) keeps the old figure for earlier year ends). So a charity with, say, £300,000 income and a 31 December 2026 year end does not need a qualified examiner for that year, while the same charity's accounts for a year that ended on 31 March 2026 still do. An unqualified examiner who was acceptable at £200,000 income may no longer qualify if income crosses the threshold for the year being examined.
What trustees must do
The trustees are responsible for arranging the independent examination. In practice:
- Prepare the accounts — the examiner reviews the accounts the trustees prepare, not the other way around. The examiner should not be writing the accounts. For guidance on which format to use and what the accounts must include, see our charity accounts guide.
- Choose a suitably independent and experienced person — and confirm they meet the qualification requirements for your income level.
- Provide access to accounting records — including ledgers, bank statements, receipts, and invoices for the period under review.
- Receive the examiner's report — and consider any matters the examiner raises. If the examiner reports a matter to the Charity Commission, trustees should be aware that this has happened.
- Submit accounts to the Commission — for charities with income over £25,000, accounts must be submitted alongside the annual return. (This £25,000 is the separate filing duty in Charities Act 2011 s.163 — "Where a charity's gross income in any financial year exceeds £25,000, a copy of the annual report ... must be transmitted to the Commission" — and is not one of the figures SI 2026/427 moved. The £25,000 that became £40,000, for financial years ending on or after 30 September 2026, is the s.145 scrutiny threshold.) Where the accounts had to be examined, the examiner's report goes with them.
What does an independent examination cost?
Cost varies considerably. An individual qualified accountant acting informally may charge little or nothing for a small community charity as a pro bono contribution. A professional firm typically charges in the range of £300–£1,500 for a straightforward independent examination of a small charity (based on sector fee ranges; individual quotes will vary), depending on the complexity of the accounts and the volume of transactions. Charities above the qualified-examiner income threshold — £250,000, rising to £500,000 for financial years ending on or after 30 September 2026 — should expect the higher end of this range.
If cost is a concern, local CVS networks often maintain lists of qualified individuals willing to act as examiner for small charities at reduced fees.
What if no examination is arranged?
Failing to have accounts independently examined when required is a reporting compliance failure. The Charity Commission may raise it in a regulatory enquiry, and persistent failure to submit properly scrutinised accounts is one of the triggers for more formal regulatory action. It is also noted in the annual return — the Commission asks whether accounts have been independently examined or audited, and trustees are required to answer accurately.
For a full picture of annual compliance obligations, see our charity compliance checklist for 2026 and the annual return guide.
This guide applies to registered charities in England and Wales. Threshold changes under SI 2026/427 apply to financial years ending on or after 30 September 2026 — confirm which threshold applies to your specific accounting period before applying. This is general guidance, not legal advice.
Sources
- Independent examination of charity accounts: guidance for trustees (CC31) — GOV.UK
- Consultation on financial thresholds in charity law: government response — GOV.UK
- The Charities Acts 1992 and 2011 (Substitution of Sums) Order 2026 (SI 2026/427) — legislation.gov.uk
- Charities Act 2011, section 145 — examination of accounts (as amended)
- Changes to charity accounting and reporting — Charity Commission, GOV.UK
Last reviewed: 5 October 2026
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