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The Threshold Rules for UK Charities

Under Charity Commission guidelines, an Independent Examination (IE) is a less onerous, highly cost-effective alternative to a full audit. Your Bristol charity qualifies for an Independent Examination if:

• your gross annual income is between £25,000 and £1 million;

• if your income is over £250,000, your total assets must be under £3.26 million to remain eligible for an IE.

If your income drops below £25,000, external scrutiny isn’t legally required by the Charity Commission (unless your governing document specifically demands it). However, many small Bristol non-profits still choose an IE to give local donors and grant-makers absolute confidence.

The Key Differences: Focus, Assurance and Cost

The fundamental difference lies in the level of scrutiny and the type of report issued:

• The level of assurance: an Independent Examination provides ‘negative assurance’. The examiner checks the records and confirms that nothing has come to light suggesting the accounts are inaccurate. A full audit provides ‘positive assurance’, where the auditor explicitly states that the accounts give a ‘true and fair view’ of the charity’s finances.

• The scope of work: an IE is a ‘scoping’ review that focuses on tracking major transactions, looking for unusual items, and ensuring compliance with the Charity SORP. A statutory audit is a deep-dive verification that tests all internal control systems, physical assets and accounting samples.

• The cost: because a full audit requires rigorous, extensive testing and strict regulatory compliance, it is considerably more expensive. An Independent Examination provides smaller Bristol community groups with a legal, professional review at a fraction of the cost.

As ACCA-certified chartered accountants, we specialise in making the independent examination process smooth, transparent and entirely stress-free for your board of trustees.