The short answer is no. Whether your charity needs an independent examination depends on several factors, mainly your income level and where your charity is registered.
No, not all charities need an independent examination. Whether your charity requires one depends mainly on two things:
Smaller charities with very low income are generally exempt, while larger charities may actually need a full audit instead.
The Charity Commission for England and Wales has set clear thresholds:
Your charity does not need an independent examination or audit. You still need to prepare accounts, but they do not need to be externally checked. However, if your charity is a charitable incorporated organisation (CIO), you still need to send accounts to the Charity Commission.
Your charity must have an independent examination. This is a legal requirement. The examiner must be independent and, unless your charity is excepted, they should have relevant qualifications or experience.
Your charity must have a full audit, not just an independent examination. This is a statutory requirement.
Some charities between £25,000 and £1 million can claim audit exemption if they meet certain criteria, such as being a small charity with income under £250,000. However, most will still need an independent examination.
The Office of the Scottish Charity Regulator (OSCR) has its own thresholds:
Your charity does not need an independent examination or audit. You still need to prepare annual accounts and submit them to OSCR, but they do not require external verification.
Your charity must have an independent examination. This is required by law in Scotland up to this income level.
Your charity must have a full audit. OSCR requires charities above this threshold to undergo audit.
Charities with income between £25,000 and £500,000 can claim exemption from audit if they meet certain conditions, but they will still need an independent examination.
The Charity Commission for Northern Ireland (CCNI) follows similar thresholds to England and Wales:
No independent examination or audit required. Accounts still need to be prepared and submitted to CCNI.
Independent examination is required.
Full audit is required.
Some charities may be exempt from the usual requirements:
Some charities are "excepted" from registering with the Charity Commission, such as certain church charities. These may have different requirements and should check with their regulator.
Certain charities, such as some educational institutions or housing associations, are "exempt" from Charity Commission supervision. They may be regulated by other bodies instead.
If your charity is also a company registered at Companies House, you have additional requirements. Companies must file accounts with Companies House, and the thresholds for audit may differ.
If your charity has subsidiary trading companies, the group accounts may have different requirements. Seek specialist advice in this situation.
If you are unsure whether your charity needs an independent examination, here is what to do:
It is important to get this right. Having an independent examination when required is a legal obligation, and failing to do so can result in your charity being flagged on the public register or regulatory action.
| Income Level | England & Wales | Scotland | Northern Ireland |
|---|---|---|---|
| Under £25,000 | No check required | No check required | No check required |
| £25,000 to £500,000 | Independent examination | Independent examination | Independent examination |
| £500,001 to £1 million | Independent examination | Audit required | Independent examination |
| Over £1 million | Audit required | Audit required | Audit required |
Note: Some charities may qualify for audit exemption. The thresholds and rules can change, so always verify with the current guidance from your regulator.
Our specialist charity accountants can help you understand what is required for your charity. We deal with the Charity Commission, OSCR, and CCNI every day, so we know the rules inside out.