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 are changing for financial years ending on or after 30 September 2026, 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 (CC31) sets out three levels, based on gross annual income:

Gross income	External scrutiny required
£25,000 or less	None required (good practice to have accounts checked)
More than £25,000, up to £1,000,000	Independent examination (unless income also exceeds £250,000 and gross assets exceed £3.26m — both limbs together)
More than £1,000,000 (or income >£250,000 with assets >£3.26m)	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.

Corrected on 2026-08-24 (2): the scrutiny table previously read "unless gross assets exceed £3.26m", making the asset limb sufficient on its own; Charities Act 2011 s.144(1)(b) is conjunctive (income above the accounts threshold and assets above £3.26 million). The threshold-change note also omitted the second substitution SI 2026/427 art.3(5) makes in s.145 — the qualified-examiner income level moving from £250,000 to £500,000. Both corrected following re-verification against the operative text on legislation.gov.uk.

Corrected on 2026-08-24: this section previously described the threshold rise as pending secondary legislation taking effect "1 October 2026." SI 2026/427 has since been made, and art.5(6) keys the substitutions to each charity's financial year end, not a fixed calendar date.

Important change for financial years ending on or after 30 September 2026: SI 2026/427 art.3(5) makes two substitutions in Charities Act 2011 s.145 — the independent examination threshold rises 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 rises from £250,000 to £500,000 (s.145(3)). Art.3(4) separately raises 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) raises the s.133 accounts threshold — the "accounts threshold" the asset limb 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 ends before that date still uses the current thresholds for that year. 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, 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, 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) applies "if ... the charity's gross income in that year exceeds £250,000" — and has nothing to do with whether you prepare receipts and payments or accruals accounts. An unqualified examiner who was acceptable at £200,000 income may no longer qualify if income crosses £250,000. For financial years ending on or after 30 September 2026 that £250,000 becomes £500,000 (SI 2026/427 art.3(5)), so a charity with, say, £300,000 income and a 31 December 2026 year end does not need a qualified examiner for that year.

What trustees must do

The trustees are responsible for arranging the independent examination. In practice:

1. 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.
2. Choose a suitably independent and experienced person — and confirm they meet the qualification requirements for your income level.
3. Provide access to accounting records — including ledgers, bank statements, receipts, and invoices for the period under review.
4. 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.
5. 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 moves. The £25,000 that becomes £40,000 is the s.145 scrutiny threshold.) The examiner's report goes with the accounts.

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.

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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