The Association of Chartered Certified Accountants (ACCA) has proposed that the UK Government should undertake a review of the financial thresholds for charities every ten years.
This recommendation was put forward in response to a consultation by the Department for Culture, Media and Sport (DCMS), concerning the financial criteria that dictate various reporting and auditing requirements for charities.
ACCA has advocated for the establishment of common thresholds across multiple regulatory matters to reduce complexity and enhance clarity for charities.
The association has stressed the efforts to reduce administrative requirements for smaller organisations are important, they must be balanced with the need to maintain effective governance and oversight of the charitable sector.
Inflation and changes in the economic landscape have rendered the current thresholds, unchanged since 2015, outdated.
ACCA suggests that the gross annual income threshold for mandatory audits should be raised from £1m to £1.5m to reflect these changes.
The body also calls for a coordinated approach to setting financial thresholds across the UK, urging DCMS to engage in dialogue with authorities in Northern Ireland and Scotland.
This is aimed at exchange of best practices in the charity sector, ACCA said.
In Scotland, the proposed increase of the audit threshold from £500,000 to £1m follows a government consultation, aligning it more closely with the threshold in England and Wales, which ACCA suggests should be increased further to £1.5m.
The current variance between the jurisdictions means that smaller Scottish charities allocate a higher proportion of their income to audit expenses compared to larger charities.
ACCA technical and strategic engagement head Glenn Collins said: “It is important that financial thresholds are proportionate for smaller charities. A periodic, systematic review is essential to ensure the regulatory environment evolves with the sector. Our recommendations aim to balance accountability and fairness, freeing up vital resources to function.”
Earlier in June 2025, ACCA urged the European Commission to streamline the Sustainable Finance Disclosure Regulation (SFDR) and reduce its reporting requirements.
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