Budget 2026: what it means for you and your business —
In short
An independent examination is a lighter-touch, lower-cost review of a charity’s accounts, and an alternative to a full audit. For charity financial periods ending on or after 30 September 2026, an independent examination is required where gross income exceeds £40,000 (up from £25,000), and a professionally qualified examiner is needed once income exceeds £500,000 (up from £250,000). LMJ Group’s ICAEW-qualified examiners can act at every income level.
It depends on your gross income, your gross assets, and — critically — your financial period end date, because the thresholds change on 30 September 2026.
Periods ending on or after 30 September 2026: an independent examination is required if gross income exceeds £40,000; the examiner must be professionally qualified if income exceeds £500,000; and an audit is required if income exceeds £1.5 million, or if gross assets exceed £5 million and income exceeds £500,000.
Periods ending before that date: the old limits apply — examination above £25,000, a qualified examiner above £250,000, and audit above £1 million of income or £3.26 million of assets with income over £250,000.
These thresholds apply to charities registered in England and Wales. Scotland (OSCR) and Northern Ireland operate different regimes.
An audit gives a positive opinion that the accounts show a true and fair view, follows auditing standards, and involves substantial testing. An independent examination is a lighter-touch review, carried out under the Charity Commission’s Directions, which checks specific matters and gives *negative* assurance — that nothing has come to the examiner’s attention suggesting the accounts are wrong.
In practice, an examination is considerably cheaper, faster and less disruptive. For charities below the audit threshold it is entirely sufficient, and it is what the Charity Commission expects.
Below the qualified-examiner threshold, the examiner must simply have the requisite ability and practical experience. Above it, the examiner must be a member of one of the bodies listed in the Charities Act 2011 — which includes ICAEW.
LMJ Group’s examiners are ICAEW members, so we can act at every income level, including above the new £500,000 threshold. The examiner must also be genuinely independent of the charity — which rules out a trustee, an employee, or anyone with a close connection.
We review your accounting records, check that the accounts agree to them, and test the specific matters the Charity Commission’s Directions require — including whether the accounts comply with the applicable SORP, whether the trustees’ annual report is consistent, and whether there is any evidence of material misstatement.
We then report to the trustees, setting out our findings and any matters that require attention. Where we identify weaknesses in records or controls, we say so plainly and tell you how to fix them.
Alongside the threshold changes, Charities SORP 2026 applies to reporting periods beginning on or after 1 January 2026, and introduces a three-tier structure based on income: Tier 1 up to £500,000, Tier 2 from £500,000 to £15 million, and Tier 3 above £15 million. There are also new requirements in the Trustees’ Annual Report covering reserves, impact and sustainability, and changes to lease accounting and income recognition.
Thresholds and SORP need to be considered together: your charity may gain flexibility over the type of accounts it prepares, while simultaneously facing new reporting expectations.
We do not carry out statutory audits, voluntary audits or charity audits. Where an audit is genuinely required, we will tell you so plainly, prepare you thoroughly for it, and can refer you to a registered auditor — while continuing to look after your accounts, tax and advisory needs.
ICAEW-qualified examiners — able to act at every charity income level, including above the £500,000 threshold.
Current on the September 2026 changes — and on the new Charities SORP 2026 reporting tiers.
We report in plain English — trustees get findings they can act on, not regulatory shorthand.
Genuine sector experience — charities, academies and not-for-profits, not a sideline.
Fixed fees, clear timetable — agreed before we start.
This page provides general information about the 2026/27 UK tax year and is not advice on your particular circumstances. Tax and regulatory rules change frequently. Please contact us before acting, or refraining from acting, on anything set out here. LMJ Group is a firm of Chartered Accountants regulated by the ICAEW. LMJ Group is not a registered auditor and does not provide audit services. Last reviewed: July 2026.
