The charity audit threshold is to double to £1 million from the end of this month, the government has announced.
A consultation on charity audits and independent audits was carried out at the end of last year and the Cabinet Office published its response on 19 February, in which it confirmed:
- the charity audit income threshold will rise from £500,000 to £1 million
- the group accounts preparation and audit income threshold will also rise to £1 million
- the income and asset component of the asset threshold will remain unchanged “at this point in time”.
On 9 March, the government began the legislative steps necessary to introduce the new thresholds before the dissolution of Parliament on 30 March 2015, ahead of the general election.
The response document said: “We have decided to bring forward the date at which these proposals become ‘live’ to 31 March 2015, meaning that charities who fall below the thresholds and whose accounting years end on or after 31 March can benefit immediately.”
The increased audit was supported by consultation respondees including the Charity Finance Group and the National Council for Voluntary Organisations. In their response, the organisations highlighted the importance of the audit process in ensuring public confidence in the sector and added: “The option to voluntarily submit to an audit should be properly communicated to charities.”
Moore Thompson’s charities and not-for-profit specialists are experienced in statutory and voluntary charity audits and independent examinations. We use our expertise to not only provide independent confirmation of the organisation’s financial integrity but to add value by identifying ways to strengthen financial systems and controls and to improve tax and financial efficiency.
For more information on the new audit thresholds, or any other aspect of charity audits and independent examinations, please contact us.