What Are the Charity Commission’s Reporting Thresholds?

Introduction

All registered charities in England and Wales must report to the Charity Commission each year, but the level of reporting required depends on the charity’s size and income. These reporting thresholds determine what documents you must submit, whether your accounts need an independent examination or audit, and how you should prepare your financial statements.

Understanding these thresholds is essential for trustees to stay compliant and avoid penalties or loss of public trust. This article explains what the Charity Commission’s reporting thresholds are, what each one means, and how to make sure your charity meets its annual obligations.

Why Reporting Thresholds Matter

The Charity Commission uses reporting thresholds to ensure that all charities, regardless of size, are transparent and accountable. Smaller charities are given lighter reporting requirements, while larger charities must provide more detailed financial information.

Failing to meet these obligations can result in your charity being marked as “in default” on the Charity Commission register, damaging your reputation and making it harder to attract funding.

Annual Reporting Requirements for All Registered Charities

Every registered charity must submit an annual return to the Charity Commission. The return provides basic information about the charity’s income, expenditure, trustees, and activities during the year.

The deadline for submitting your annual return and accounts is 10 months after your financial year end. For example, if your charity’s year ends on 31 March, you must file by 31 January the following year.

The Charity Commission’s Reporting Thresholds

The reporting thresholds are based primarily on gross annual income, with additional requirements if the charity holds significant assets or has company status.

1. Charities with Income Under £25,000

• Annual return: Only required if your charity’s income is above £10,000.

• Accounts: You must keep financial records and prepare accounts, but you do not need to submit them to the Charity Commission unless requested.

• Independent examination or audit: Not required by law.

However, your charity should still prepare clear accounts and a trustee report each year to maintain good governance and transparency, even if you are below the £25,000 threshold.

2. Charities with Income Between £25,000 and £250,000

• Annual return: Must be submitted each year.

• Accounts: Must prepare and submit annual accounts and a trustee report to the Charity Commission.

• External scrutiny: An independent examination is required. This is a review by a qualified person to ensure the accounts are consistent with the charity’s records and free from significant error.

An independent examination is less formal and costly than a full audit but still provides assurance that financial statements are reliable.

3. Charities with Income Between £250,000 and £1 Million (and Assets Below £3.26 Million)

• Annual return: Required.

• Accounts: Must prepare accrual-based accounts (rather than simple receipts and payments) in line with the Charities Statement of Recommended Practice (SORP).

• External scrutiny: Must have an independent examination by a qualified accountant or, in some cases, a full audit if required by the governing document or funders.

At this level, the Charity Commission expects charities to have more formal financial systems and to demonstrate strong internal controls.

4. Charities with Income Over £1 Million or Income Over £250,000 and Assets Over £3.26 Million

• Annual return: Required.

• Accounts: Must be prepared on an accruals basis in accordance with SORP.

• External scrutiny: A statutory audit is mandatory.

An audit must be carried out by a registered auditor who provides a professional opinion on whether the charity’s financial statements present a true and fair view.

Audits are more detailed than independent examinations and provide greater assurance to trustees, regulators, and funders that the charity’s finances are well managed.

Charitable Incorporated Organisations (CIOs)

Charitable Incorporated Organisations (CIOs) follow slightly different rules because they are a distinct legal form regulated solely by the Charity Commission (not Companies House).

CIOs must:

• Prepare annual accounts and a trustee report regardless of income

• Submit both documents to the Charity Commission every year

• Have an independent examination if their income exceeds £25,000

• Have a full audit if their income exceeds £1 million or if they meet the asset threshold

Even very small CIOs must submit accounts annually, so trustees should ensure accurate record keeping from the outset.

What Needs to Be Included in the Annual Accounts

Depending on the charity’s size and income, accounts must include:

• A Trustee Annual Report explaining the charity’s activities, achievements, and public benefit

• A Statement of Financial Activities (SOFA) showing income and expenditure

• A Balance Sheet summarising assets and liabilities

• Notes to the Accounts providing additional details and context

• An Independent Examiner’s Report or Auditor’s Report, where required

Larger charities may also need to include a Cash Flow Statement and comply fully with the Charities SORP framework.

How to Stay Compliant

To meet reporting requirements on time, charities should:

• Keep financial records up to date throughout the year

• Schedule reviews with an accountant to prepare for year-end reporting

• Assign responsibility to a trustee or staff member for monitoring deadlines

• Confirm whether an independent examination or audit will be needed

• Ensure the trustee report explains how the charity delivers public benefit

Trustees are collectively responsible for ensuring that the charity complies with these obligations.

Example Scenario

Imagine Helping Hands Trust, a charity supporting vulnerable families, has an income of £280,000 and assets worth £150,000. Based on these figures, it must:

• Prepare accrual-based accounts in line with SORP

• Submit its annual return, accounts, and trustee report within 10 months of year end

• Arrange an independent examination by a qualified accountant

If Helping Hands grows to £1.2 million in income, it will then need a full statutory audit instead of an independent examination.

The Role of an Accountant

An accountant who specialises in charities can:

• Determine whether your charity needs an audit or independent examination

• Prepare compliant annual accounts and trustee reports

• Ensure deadlines are met and submissions are accurate

• Advise trustees on improving financial governance and record keeping

Having professional support reduces the risk of errors or delays and ensures your charity remains compliant year after year.

Common Mistakes to Avoid

• Missing the 10-month filing deadline

• Submitting incomplete or unsigned accounts

• Failing to arrange the correct level of scrutiny

• Not keeping financial records for at least six years

• Ignoring changes in income that push the charity into a higher reporting category

Avoiding these mistakes helps maintain your charity’s good standing with the Charity Commission and protects public trust.

Conclusion

The Charity Commission’s reporting thresholds ensure that all charities are transparent about their finances while keeping requirements proportionate to their size. Smaller charities have lighter obligations, while larger ones must submit detailed, audited accounts.

Trustees must understand which category their charity falls into and plan ahead for annual reporting. Working with an accountant helps ensure compliance, prevents missed deadlines, and supports good financial management. Accurate, timely reporting not only meets regulatory requirements but also strengthens confidence among donors, funders, and the public.