The Institute of Chartered Accountants in England and Wales has issued a timely reminder that small charities face fundamentally the same level of regulation as larger ones, and has warned trustees of such small-scale charities that they should not fall into the trap of using their size (or lack of it) as justification for poor record-keeping or informal governance.
Whilst there are some concessions which reduce the regulatory burden for smaller charitable organisations – the latest of which come into effect on 30th September this year – the legal duties of trustees are fundamentally the same, whether their charity’s income is in the thousands or the millions.
The new thresholds which come into effect in the autumn do help to an extent: they raise the annual income threshold for a full audit from £1 million to £1.5 million, with the asset-based audit threshold also rising, from £3.26 million to £5 million (with the accompanying income threshold rising from £250,000 to £500,000).
For the smallest charities, the threshold at which accounts must be independently examined is also rising in September, from £25,000 to £40,000. It is estimated that this will benefit around 11,000 charities in the UK.
In addition to this, the new Statement of Recommended Practice (SORP) for Charities, which came into effect on 1st January 2026, creates three different tiers of charity (based on annual income), varying the reporting requirements according to the size of charity. For more details on this, see the article by my colleague Abi Robinson here.
Despite these concessions, the regulatory and governance rules are essentially the same whatever the size of the charity, and the ICAEW points out the importance of making trustees aware of this and recommend Trustees gain training and support in cases where they may not have the relevant skills, or to help them understand their financial responsibilities. The Charity Commission provides clear guidance to Trustees and charities can reach out to their auditors and independent examiners for guidance also.
Small Charity Week takes place every year in June, highlighting the contribution made by the thousands of smaller charitable organisations across the UK. Their website also offers a number of useful resources right through the year and can be found at www.smallcharityweek.org.uk.