Consultation on charity law thresholds: the outcomes

The Department for Culture, Media and Sport has published the proposed changes to financial thresholds under charities legislation and supporting regulations. This followed a consultation earlier in the year which marked the first review of the thresholds since 2013. The changes are intended to come into operation on 1 October 2026. 

Amongst the key changes is a 50% increase in the income audit threshold, which will rise to £1.5 million. To reduce the burden on the smallest charities, the threshold for independent examination requirements will also rise, from £25,000 to £40,000. In addition, the threshold for the account and statement option for lower income charities, and for the qualification requirement for independent examiners, will rise from £250,000 to £500,000. 

Some thresholds will remain unchanged. These include the £5,000 income threshold for charity registration and the £100,000 threshold for registration of excepted charities. In addition, the £10,000 threshold, above which charities must file annual returns, and the £25,000 threshold, for filing an annual report and accounts, remain unchanged. 

In a further de-regulatory initiative, DCMS has committed to working with the Charity Commission to develop a standardised form and content for receipts and payments accounts. This would be a welcome development to simplify processes for smaller charities. Also welcome is the DCMS’s proposal to work with the Commission to review the guidance provided on independent examination. DCMS states that it is also working with the Commission to consider further deregulatory opportunities, including suggestions raised during the consultation. 

The Government estimates that the threshold changes will produce annual savings of £47 million on average. Full details of the changes and the consultation findings.