Charities Act 2006

28 Annual audit or examination of accounts of charities which are not companies

(1) Section 43 of the 1993 Act (annual audit or examination of accounts of charities which are not companies) is amended as follows.

(2) For subsection (1) substitute—

“(1) Subsection (2) below applies to a financial year of a charity if—

(a) the charity’s gross income in that year exceeds £500,000; or

(b) the charity’s gross income in that year exceeds the accounts threshold and at the end of the year the aggregate value of its assets (before deduction of liabilities) exceeds £2.8 million.

• “The accounts threshold” means £100,000 or such other sum as is for the time being specified in section 42(3) above.”

(3) In subsection (2) (accounts required to be audited) for paragraph (a) substitute—

“(a) would be eligible for appointment as auditor of the charity under Part 2 of the Companies Act 1989 if the charity were a company, or”.

(4) In subsection (3) (independent examinations instead of audits)—

(a) for the words from “and its gross income” to “subsection (4) below)” substitute “but its gross income in that year exceeds £10,000,”; and

(b) at the end insert—

“This is subject to the requirements of subsection (3A) below where the gross income exceeds £250,000, and to any order under subsection (4) below.”

(5) After subsection (3) insert—

“(3A) If subsection (3) above applies to the accounts of a charity for a year and the charity’s gross income in that year exceeds £250,000, a person qualifies as an independent examiner for the purposes of paragraph (a) of that subsection if (and only if) he is an independent person who is—

(a) a member of a body for the time being specified in section 249D(3) of the Companies Act 1985 (reporting accountants);

(b) a member of the Chartered Institute of Public Finance and Accountancy; or

(c) a Fellow of the Association of Charity Independent Examiners.”

(6) For subsection (8) substitute—

“(8) The Minister may by order—

(a) amend subsection (1)(a) or (b), (3) or (3A) above by substituting a different sum for any sum for the time being specified there;

(b) amend subsection (3A) by adding or removing a description of person to or from the list in that subsection or by varying any entry for the time being included in that list.”