Consultation on financial thresholds in Charity Law

It’s a busy time in the charity sector as another consultation has been launched, in addition to the Exposure Draft SORP consultation 2026 which ends on 30th June, the Government Department for Digital, Culture, Media & Sport (DCMS) has also announced a 10-week consultation on financial thresholds in Charity Law which closes on 10th June 2025.

The consultation covers a total of twenty one thresholds between 5 categories as follows:

3 thresholds affecting registration requirements within the Charity Commission.
9 thresholds affecting reporting and accounting requirements for independent examinations and audits, including group reporting and annual returns.
3 thresholds affecting fundraising for ‘professional fundraisers’, lower income collectors and donor refunds.
2 thresholds affecting other charity regulation including Gross annual income threshold below which the Charity Commission has concurrent jurisdiction with the High Court to make certain types of orders and release of charity rent charges.
4 thresholds affecting those recently inserted or amended by the Charities Act 2022 such as the value of gifts of cash, property, ex gratia payments and permanent endowments that can be applied without the consent of the Charity Commission.

It is important to note that taxation thresholds, such as Gift Aid, are not covered by this consultation since they are provided under tax law rather than charity law.

Frequency of review

Some of the thresholds under review are long overdue and were set as far back as 1992. 17 have been updated in the last 10 years. The current commitment made by the Government is to ensure that thresholds are considered, at a minimum, every 10 years (though this does not automatically mean they will increase if there is no need to do so). The frequency of future threshold reviews is also a consultation question – should they be considered more regularly?

Inflationary increases and other options

The consultation considers the impact of inflationary increases from the point at which each threshold was last set, up to September 2024, using the Consumer Price Index including Housing (CPIH), in order to maintain fair and proportionate reporting requirements based on sector needs. Another consultation question asks whether the CPIH is the most appropriate measure, or if there is a more suitable alternative for the sector.

The consultation also recognises that charity income has not always increased in line with inflation, and that there is a need to balance the cost of regulation – for both charities and charity regulators – with the accountability, transparency, and trust expected by those who provide public funds for charitable purposes and the benefit of society as a whole.

Therefore inflationary increase may not be the appropriate answer, and so the consultation also considers some other options where it feels it is relevant and proportionate to do so:

Option A – do nothing and keep the threshold at the current level

Option B – the inflationary increase (but is CIPH the correct measure?)

Option C – a partial increase to raise levels by approximately 20% from the base level, thus recognising that charity income does not necessarily increase with inflation.

As an example, the consultation considers the income threshold for audit, which is currently set at £1,000,000 and was last updated in 2015. Option A would maintain the income threshold at £1,000,000, while Option B would increase it to £1,500,000, and Option C would introduce a partial increase to £1,200,000. Similarly, the threshold for assets has been raised under each of the three options, as has the threshold for independent examinations.

This will no doubt be a welcome relief to smaller charities currently caught by costly regulatory requirements, particularly in the current climate. However, the DCMS is urging some caution to avoid further damaging public trust and confidence in charities through reduced reporting or transparency.

It is therefore important that the requirements of all regulators are aligned as far as possible – including those under Company Law and the exposure draft SORP – to avoid reducing the regulatory burden in one area only to increase it in another. For example, the exposure draft SORP proposes significant changes to the Trustees’ Report, which will affect charities depending on the level of income they receive.

A full list of the threshold proposals are detailed at the end of this article.

Have your say

As always, it is important that everybody impacted in the sector considers these proposals and provides feedback to the consultation questions. Price Bailey will submit a response in due course, so please get in touch with us if you have any queries or concerns about the consultation questions.

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Summary of all thresholds and options:

No.	Title	Set In	Option A – current threshold	Option B – inflationary increase	Option C – partial increase
1	Registration for Charities	2007	£5,000 – Recommended	£10,000	N/A
2	Registration for Excepted Charities	2006	£100,000 – Recommended	N/A	N/A
3	Statement in Official Publications	1995	£10,000 – Recommended	£20,000	N/A
4	Annual Returns	1995	£10,000 – Recommended	£20,000	N/A
5	Annual Reports	2009	£25,000 – Recommended	£40,000	£30,000
6	Independent Examination requirements	2009	£25,000	£40,000	£30,000
7	Qualification requirements for Independent Examiners	2006	£250,000	£400,000	£300,000
8	Account and Statement option for lower-income charities	2009	£250,000	£400,000	£300,000
9	Audit of accounts of larger charities – Income	2015	£1,000,000	£1,500,000	£1,200,000
10	Audit of accounts of larger charities – Assets	2009	£3,260,000	£5,000,000	£4,000,000
11	Aggregate income for Group Accounts	2015	£1,000,000	£1,500,000	£1,200,000
12	Audit requirement for Group Accounts	2015	£1,000,000	£1,500,000	£1,200,000
13	Remuneration for ‘professional fund-raisers’	2009	• £10 a day • £1,000 a year • £1,000 in remuneration in connection with any fund-raising venture in the course of which money or other property is solicited for the benefit of that institution	£15 a day, £1,500 a year, • £1,500 in remuneration in connection with any fund-raising venture in the course of which money or other property is solicited for the benefit of that institution. Recommended	N/A
14	Remuneration for lower-paid collectors	2009	• £10 a day • £1,000 a year, or • £1,000 in remuneration in connection with any fund-raising venture in the course of which money or other property is solicited for the benefit of that institution.	£15 a day • £1,500 a year, or • £1,500 in remuneration in connection with any fund-raising venture in the course of which money or other property is solicited for the benefit of that institution. Recommended	N/A
15	Donor Refunds	2009	£100	£150 – Recommended	N/A
16	Charity Commission Concurrent Jurisdiction with High Court	1992	£500	£1,000 – Recommended	N/A
17	Release of Charity Rentcharges	2009	£1,000 – Recommended	£1,500	N/A
18	Maximum value of gifts applicable under cy-près	2022	£120 – Recommended	N/A	N/A
19	Resolution applying money or other property to cy-près	2022	£1,000 – Recommended	N/A	N/A
20	Small ex-gratia payments	n/a	See table in Threshold 20 – Recommended	N/A	N/A
21	Spending on permanent endowments	2022	£25,000 – Recommended	N/A	N/A

We always recommend that you seek advice from a suitably qualified adviser before taking any action. The information in this article only serves as a guide and no responsibility for loss occasioned by any person acting or refraining from action as a result of this material can be accepted by the authors or the firm.