What is changing?
The 2025 Regulations will update the existing Charities Accounts (Scotland) Regulations 2006 ("2006 Regulations"), including changes to thresholds for accounting submissions to OSCR, the addition of 'safety and security dispensations' for charities that wish to withhold sensitive information (where public disclosure would present a safety risk), as well as more general administrative updates, including defined terms.
Further details on these changes are provided below:
1. Audit Income & Group Account Thresholds (Regulations 6, 10 & 11 of the 2006 Regulations)
The 2025 Regulations increase the minimum level at which a charity must undergo a full audit from £500,000 to £1,000,000. This threshold also applies when charities are required to prepare group accounts and when an independent examination becomes mandatory.
2. Safety & Security Dispensations (Regulation 15 of the 2006 Regulations)
Charities will be able to apply to OSCR for a 'safety and security dispensation' to withhold information from publicly available accounts if they believe that disclosing the information would present an actual risk to the safety or security of any person (such as a trustee's name and address). OSCR is required to grant the application where a genuine threat exists. If a decision by OSCR is considered insufficient by the applicant, it can also be appealed under the Charities and Trustee Investment (Scotland) Act 2005 ("2005 Act").
3. Statement of Recommended Practice ("SORP") and External Reviews (Regulation 1 of the 2006 Regulations)
The definition of SORP will be updated to match the October 2025 edition of Financial Reporting Standard 102, ensuring Scottish charities follow the same reporting rules as the rest of the UK. Two existing terms – "auditor's report" and "independent examiner's report" – will be replaced with the single phrase "independent report on accounts" to provide certainty that both forms of external evaluation for charities are considered equal under the 2005 Act.
4. Education Charities (Regulation 14 of the 2006 Regulations)
Charities operating in higher or further education, including universities and colleges, will now prepare accounts using the 2025 edition of SORP for Further and Higher Education.
5. Annual Reports for Large Charities (Schedule 2 of the 2006 Regulations)
Charities with more than 50 trustees will no longer be required to list every trustee in their annual report. The 2025 Regulations require that, where there are more than 50 trustees, it will now be sufficient to name any 50 trustees.
What do I need to do next?
There will be a transition period once the 2025 Regulations come into force, and the changes only apply to financial years beginning on or after 1st January 2026.
Trustees should ensure that they are aware of the incoming changes and that finance and governance teams understand the new thresholds and reporting terms. OSCR is also likely to produce guidance to complement the new legislation.
Charities should also review their internal policies to ensure these align with the new safety and security dispensation rules.
Conclusion
The incoming changes mean that around 93% of Scotland’s 24,500 charities will no longer need to undergo an audit – a potentially significant saving in terms of associated costs and administrative burdens.
Changes to clarify the legal position on SORP and other terms aim to reduce confusion and ensure charities are aware of what is required in terms of external reviews and financial reporting.
Finally, charities working with vulnerable groups or in sensitive areas will welcome the changes to safety and security measures being implemented.
The full text of the 2025 Regulations and explanatory notes are available here.
This article was co-authored by Lisbet Wang, Trainee Solicitor, in MFMac's Charities & Third sector team.
