31 October 2025 — DCMS has confirmed major increases to charity financial reporting thresholds in England and Wales.
Key Changes
- Audit threshold rising from £1m to £1.5m (50% increase).
- Independent examination threshold increasing from £25,000 to £40,000.
- Threshold requiring a qualified independent examiner doubled to £500,000.
- Accrual accounting threshold doubling from £250,000 to £500,000, aligning with the new SORP tier.
Impact
- DCMS estimates £47m in annual savings for the charity sector.
- Changes aim to reduce regulatory burden, particularly for smaller charities.
Implementation
- New thresholds will take effect on 1 October 2026.
Next Steps
- DCMS and the Charity Commission will work on:
- Standardised receipts‑and‑payments formats
- Digitalisation of charity accounts
- Updated guidance on independent examination
- Further deregulatory opportunities
Sector Response
- The Charity Finance Group welcomed the changes, saying they better reflect current operational realities and will save charities time and money while maintaining public trust.
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