Scottish charities are set to benefit from changes to legislation
which will raise the audit income threshold from £500,000 to £1
million.
Secondary legislation has been laid in the Scottish Parliament
which, subject to approval by MSPs, will come into force on 1
January next year.
That means 93% of Scotland's 24,500 charities won't need an audit
once the new rules come into force, reducing their administrative
and financial burdens.
The change responds to feedback from charities about rising costs
and the limited availability of specialist charity auditors.
Social Justice Secretary said:
“It's important that charity regulation not only meets the needs
of charities, but is fair and works well.
"We recognise the real financial pressures on charities
particularly the challenges they face as a result of the UK
government's increase to employers' national insurance
contributions.
"We have listened and responded with this change to the audit
income threshold. This means that only around 93% of charities
registered in Scotland will require an audit.
"Charities will still be held to high standards because they are
accountable to the public."
Chief Executive of SCVO Anna Fowlie said:
"I very much welcome this move by Scottish Government. The
threshold for requiring a full audit has been static for decades,
placing a burden on small charities who simply can't afford the
cost or the time. There is also a shortage of auditors prepared
to take on such small pieces of work."
Background
The Charities Accounts
(Scotland) Amendment Regulations 2025
In addition to the increase to the audit income threshold, the
revised regulations reflect changes in the Charities (Regulation
and Administration) (Scotland) Act 2023 and update references to
the Charities Statement of Recommended Practice (SORP) and the
Further and Higher Education SORP, both of which have been
revised in 2025.
The increased audit income threshold will apply to financial
years beginning on or after 1 January 2026.
