Charity Accountants & Independent Examiners in London

Charities are among the most regulated small organisations in the UK. A registered charity must keep proper accounting records, prepare annual accounts and a trustees' annual report, file with the Charity Commission, and — depending on its size — have the accounts independently examined or audited. Charitable companies answer to Companies House as well, and charities claiming Gift Aid answer to HMRC too.

The rules differ by structure (trust, unincorporated association, charitable company, CIO), by income level, and by whether accounts are prepared on a receipts-and-payments or accruals basis. It's a lot for volunteer trustees to carry — and getting it wrong is publicly visible, because charity filings sit on the public register where funders, donors and journalists can see them. Overdue accounts are flagged in red on the Commission's website, and nothing undermines a grant application faster.

We act for charities, churches, community organisations and not-for-profits across London, handling the compliance cycle end to end so trustees can concentrate on the charity's work.

The level of external scrutiny a charity needs depends on its gross income and assets:

Charity's position	Scrutiny required
Gross income £25,000 or less	Generally no independent scrutiny required (unless the governing document demands it)
Gross income over £25,000, up to £1 million	Independent examination (a qualified examiner is required where income exceeds £250,000)
Gross income over £1 million	Full statutory audit
Gross assets over £3.26 million and gross income over £250,000	Full statutory audit, even though income is below £1 million

Two further caveats trip charities up: the governing document may require an audit regardless of size, and some funders insist on audited accounts as a grant condition. We check both before advising which route applies — an unnecessary audit wastes money, but discovering mid-year that an audit was required after all is worse.

An independent examination is a lighter-touch alternative to audit, designed for small and medium charities. The examiner reviews the accounting records and the accounts, checks that they agree with each other and comply with the applicable requirements, and considers whether anything suggests the accounts are materially misstated. The examiner then signs a report that accompanies the accounts on the public register.

It is less intrusive and considerably less expensive than an audit, but it is not a rubber stamp: the Charity Commission sets Directions that every examiner must follow, and examiners must report certain matters — such as significant concerns about the charity's affairs — directly to the Commission. Where income exceeds £250,000, the examiner must hold a recognised professional qualification.

As chartered certified accountants, we carry out independent examinations in accordance with the Commission's Directions, and we treat the process as more than compliance — our examination letters to trustees regularly flag practical improvements in controls, reserves policy and record-keeping.

Charities preparing accruals accounts must follow the Charities SORP — the Statement of Recommended Practice — which shapes charity accounts quite differently from a company's:

• Fund accounting — income and assets must be tracked by fund: unrestricted, restricted (given for a specific purpose) and endowment. Spending restricted money on the wrong thing is a breach of trust, so the accounting genuinely matters.
• Statement of Financial Activities (SoFA) — replacing the profit and loss account, analysing income and expenditure by category and by fund.
• Trustees' annual report — a narrative report covering the charity's purposes, activities, achievements and public benefit, filed alongside the accounts.
• Specific disclosures — trustee payments and expenses, related-party transactions, reserves policy, and how the charity manages risk.

Smaller non-company charities below the income threshold can instead prepare simpler receipts-and-payments accounts. We advise which basis applies, prepare the accounts on the correct footing, and draft or review the trustees' report so the whole package satisfies the Commission first time.

Registered charities must complete an annual return to the Charity Commission within ten months of the financial year end, with the accounts and trustees' report attached once income passes the relevant threshold. The return itself has grown over the years — it now asks about income sources, overseas activity, safeguarding and more — and what you file is publicly visible on the register.

Behind the filings sit the trustees' wider duties: acting in the charity's best interests, managing resources responsibly, ensuring funds are applied for the charity's purposes, and maintaining adequate financial controls. Trustees are collectively responsible for the accounts even when an accountant prepares them, so we make a point of presenting the accounts to trustee boards in plain English — what the numbers say, where the risks sit, and what the reserves position really means — rather than simply posting a PDF.

We also help charities set practical policies the Commission and funders expect to see: reserves policies, financial controls, and expense procedures proportionate to the charity's size.

Gift Aid lets a charity reclaim basic-rate tax on eligible donations from UK taxpayers — 25p for every £1 donated — yet a remarkable amount goes unclaimed each year through missing declarations, poor records or simply nobody getting round to it. Claims can generally be made for donations going back four years, so a charity catching up on Gift Aid for the first time often receives a substantial repayment.

We help charities:

• Register with HMRC for Gift Aid and set up compliant declaration wording
• Build record-keeping that survives an HMRC audit — declarations, donation records and audit trails
• Prepare and submit claims, including the Gift Aid Small Donations Scheme for cash and contactless collections where individual declarations aren't practical
• Handle sponsorship, membership subscriptions, charity events and other areas where the eligibility rules are easy to get wrong

For many small charities, a properly run Gift Aid process is worth more than any single fundraising event — and unlike fundraising, it repeats every year with almost no extra effort.