The government has brought forward changes to charities legislation

Changes to the audit requirement for charities have been announced, with the government stating that implementation of the changes will be brought forward. 

The government stated that ‘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 requirement for an audit for a charity is now where the charity has:

  • an income of more than £1m; or 
  • assets worth more than £3.26m and an income of more than £250,000.

In the feedback on the consultation, the government stated:

‘In light of the consultation responses, the Government intends to pursue the following proposals: 

a. increasing the income threshold from £500,000 to £1m; 

b. increasing the aggregate group income threshold at which parent charities should have group accounts audited from £500,000 to £1m; 

c. increasing the preparation threshold for group accounts from £500,000 to £1m; 

d. adding the Institute of Financial Accountants and the Chartered Public Accountants Association (subject to the submission of appropriate evidence) to the list of recognised professional accountancy membership bodies whose appropriately qualified members can carry out independent examinations of the accounts of charities with incomes that are more than £250,000. 

The Government intends to leave both the income and asset component of the asset threshold unchanged at this point in time. 

A statutory instrument will be drafted and will be laid in Parliament with sufficient time before dissolution on 30 March 2015. The changes should come into effect on 31 March 2015.’

The draft statutory instrument, when available, can be accessed via the 'Related links' section on this page.