93% of Scotland’s 24,500 charities will not need an audit once new regulations are passed by the Scottish parliament to raise the turnover threshold to £1m.

Secondary legislation has been laid in the Scottish Parliament, which, subject to approval by MSPs, will apply to financial years beginning on or after 1 January 2026. As most small charities have a year end of 31 March, this will be their year ended 31 March 2027.

The threshold for requiring a full audit has been static for decades, even though the threshold was raised in England and Wales many years ago to £1M.

This move will be welcomed by many charities as there is a significant shortage of auditors able and prepared to take on such small pieces of work. Small audits are also very expensive.

The threshold change does not include any leeway where a charity falls over the limit on a temporary basis, perhaps as a result of a single major donation. For charities that receive a one-off grant or legacy, pushing them temporarily over the audit threshold, the cost and effort of a one-off audit may outweigh the related benefit.

A better approach would have been to allow a one-year grace period for charities breaching the audit threshold in a single year, bringing practice for Scottish charities in line with company audits generally.

There are also some changes to reporting requirements for Scottish charities.

The revised Charities Accounts (Scotland) Amendment Regulations 2025 reflect changes to the Charities SORP announced last week, which simplified some reporting requirements for smaller charities, again effective from 2026.

So, if you are expecting a large donation that would put you over the £500k audit threshold, can you delay it?

If you need to have an audit at the moment, will you need one going forward? It could be a big saving in professional fees.