Government increases audit threshold for charities. 26 February 2015 Share The Government has announced that it will increase the audit threshold for charities, likely with effect for accounting year ends on or after 31 March 2015, following their recent consultation. The incoming resources threshold for charities will be raised from the current £500k to £1m. They also plan to increase the threshold for group accounts, and the need to prepare group accounts to the same £1m to align with the new audit threshold. However, it is likely also that those charities with assets above £3.26m will still need an audit if their income is above just £250k. This is linked in statute to the requirements to prepare accruals accounts and the Government do not, for now, wish to increase the receipts and payments option for charities. The Government plan to keep the £3.26m asset requirement at the current level. This is likely to be enacted with a statutory instrument laid before Parliament by its dissolution on 30 March 2015, and the Government estimate that up to 4000 charities will no longer need an audit, and may opt for exemption. Those charities will need an independent examination. A further complexity arises in that any charity that is also registered in Scotland or Northern Ireland cannot take advantage of the lower limits, which still remain in devolved areas. This will affect English charities who may have a year end from 31 March this year. Kevin Cooper, partner at Moore, Isle of Wight office said: "This is generally good news for smaller charities, who currently have to bear the cost of external audit, and yet, by virtue of their size, find it hard to meet all the requirements of the audit regime." For further information please get in touch. Kevin CooperT 01983 824807E [email protected]