Under the new regulations, which have been laid before the Scottish Parliament, approximately 93% of Scotland's 24,500 registered charities will be able to choose an independent examination instead of a full statutory audit. This represents a significant shift that will reduce both the financial and administrative burden on smaller and medium-sized charities, allowing them to redirect precious resources toward their charitable purposes.
Social Justice Secretary Shirley-Anne Somerville acknowledged the "real financial pressures on charities," particularly in light of the UK government's recent increase to employers' national insurance contributions. This recognition is especially timely, as charities across Scotland grapple with the impact of rising costs while demand for their services continues to grow.
Anna Fowlie, Chief Executive of SCVO, highlighted that "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." She also noted the shortage of auditors prepared to undertake smaller audit engagements, a problem that has been well-documented across the charity sector.
The potential savings from this change are substantial. While specific figures for Scotland have not yet been published, recent data from the Department for Culture, Media and Sport (DCMS) in England and Wales provides a useful benchmark. DCMS estimates that the comparable threshold increase in England and Wales has the potential to save the sector £47 million in audit fees annually. If Scotland's charities see proportional savings, this could represent a significant financial boost to the sector, freeing up funds that can be reinvested in charitable activities and service delivery.
One of the potential concerns about reducing the number of charities who will have to undertake a full statutory audit surrounds the issue of public trust. However, as Somerville stated, "Charities will still be held to high standards because they are accountable to the public.”
The new regulations, introduced as The Charities Accounts (Scotland) Amendment Regulations 2025, also reflect other important changes from the Charities (Regulation and Administration) (Scotland) Act 2023 and update references to the revised Charities Statement of Recommended Practice (SORP) and Further and Higher Education SORP, both updated in 2025.
CFG’s Head of Policy, Richard Sagar comments: “CFG is delighted that the Scottish Government and OSCR have taken this positive step forward and we’re grateful to those who support for their continued advocacy in supporting smaller charities across Scotland. The Scottish Government's decision demonstrates a clear understanding of these challenges and a willingness to listen to sector feedback.
“CFG has long supported the raising of audit thresholds across the UK on the basis of the often limited availability of specialist charity auditors, the prohibitive costs of audits for smaller organisations, and the administrative burden that full audits place on charity staff and trustees.
“The next positive step forward we'd like to see to ensure greater parity across the UK, is for the Scottish Government and OSCR to increase the threshold to £1.5m”
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