IE - New Thresholds (Charities Act 2006)

Charities that are not companies
For financial years starting on or after 27 February 2007:
A charity that is not a company must have a professional audit of its accounts if the following thresholds apply:
its gross annual income is above £500,000; or
it has an annual income over £100,000 and assets exceeding £2.8 million;
or, regardless of these thresholds, if:
its governing document states that it must have a
professional audit; or the Commission orders the accounts of the charity to be professionally audited.

For unincorporated charities that are not required to have a professional audit:
• If the charity’s annual income is above £10,000, its accounts require independent examination.
• If its annual income is above £250,000, then the independent examiner must be a member of a professional body named in the Act.
• Charities with an annual income of £10,000 or less must still prepare accounts and have them available on request.


Charities that are companies
What happens to charitable companies with levels of assets or income below the audit thresholds?
• A charitable company with an annual income of between £90,000 and £500,000 and assets of £2.8 million or less must have an accountant’s report.
• A charitable company with an annual income of £90,000 or less needs neither a professional audit nor an accountant’s report, unless its assets are more than £2.8 million.


What is the audit threshold for charitable companies?
• A charitable company with an annual income of more than £500,000 or assets of more than £2.8 million must have a professional audit.

The provisions have come into force for financial years
starting on or after 27 February 2007. Further changes will create a single audit framework for all charities, whether or not they are companies. These changes are due in early 2008.