What every charity trustee should know about their financial responsibilities

If you're a trustee of a place of worship or a faith-based charity, you hold legal responsibility for your organisation's finances — even if you're not the one keeping the books, and even if you joined as a volunteer with no finance background. That can feel daunting. The good news is that the core duties are knowable, and most are common sense once they're explained clearly.

This article sets out what trustees across all faith traditions need to understand about their financial responsibilities under UK law.

You are collectively responsible — all of you

Trusteeship is a collective responsibility. Every trustee shares the duty for the charity's finances, regardless of role. You cannot fully delegate that responsibility away. You can — and usually should — delegate the day-to-day bookkeeping to a treasurer or staff member, but the board as a whole remains accountable for oversight.

In practice this means: even if you "leave the numbers to the treasurer", you are still legally on the hook for them. Every trustee should be able to read the accounts, ask sensible questions, and understand the headline financial position.

Act with reasonable care — the duty of prudence

The Charity Commission expects trustees to manage the charity's resources responsibly. This is sometimes called the duty of prudence. It includes:

• Making sure charity money is spent only on the charity's purposes
• Avoiding undue risk to the charity's assets or reputation
• Not over-committing the charity financially
• Acting in the charity's best interests, setting aside personal or congregational politics

Keep proper accounting records

Every charity must keep accounting records that are sufficient to show and explain its transactions, and to disclose its financial position at any time. For most faith-based organisations this means recording all income (collections, donations, Gift Aid, grants, hall hire) and all expenditure, and being able to produce accounts from those records.

If your charity operates restricted funds — money given for a specific purpose, such as a building appeal or a particular project — you must track and report these separately from your general (unrestricted) funds. Spending restricted money on the wrong thing is a breach of trust, even if it was an honest mistake. (See our guide to funds explained for more.)

Understand your external scrutiny duties — and the 2026 changes

Most charities must have their annual accounts checked by someone independent. The level of scrutiny depends on your income:

• Independent examination — a lighter-touch review, suitable for smaller and less complex charities
• Audit — a fuller, more rigorous process giving a "true and fair" opinion, required for larger charities

Important — thresholds are changing. In England and Wales, the income threshold above which an independent examination is required is rising from £25,000 to £40,000, and the statutory audit threshold is rising from £1 million to £1.5 million. The qualification threshold (above which an independent examiner must be professionally qualified) rises from £250,000 to £500,000.

These changes are expected to apply to accounting periods ending on or after 30 September 2026, with the government intending them to come into force on or after 1 October 2026. Correct as of June 2026 — the change is being delivered by secondary legislation, so confirm the current position before relying on it.

A reminder that applies in every year: your governing document or a funder may require an audit regardless of income, so always check.

Different rules and thresholds apply in Scotland (regulated by OSCR) and Northern Ireland (regulated by CCNI), and these are not changing in step with England and Wales. If you operate across borders, you must satisfy both regimes. See our guide to independent examination vs audit.

Manage conflicts of interest

Faith communities are often close-knit, and that's a strength — but it raises the chance of conflicts of interest. If a trustee, or a person connected to them, stands to benefit from a charity decision (a contract, a payment, employment of a relative), that trustee should declare the interest and usually step back from the decision. Keep a register of interests and minute these decisions.

Hold appropriate reserves

Trustees should decide how much the charity needs to hold in reserve to remain resilient, and write this down as a reserves policy. Holding too little leaves you exposed; holding too much without explanation can attract questions. There's no single "right" figure — see our separate guide on setting a reserves policy.

Report on time

Charities must file accounts and returns with their regulator by the deadline. Late filing is published on the public register and damages trust. Put the deadlines in your calendar the day your financial year ends.

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This article is general information, not advice. Rules and figures change and can depend on your circumstances. Check the current position with the Charity Commission (or OSCR / CCNI) or get in touch and we'll help.

Sources verified (June 2026):

• DCMS, Consultation on financial thresholds in charity law: government response — https://www.gov.uk/government/consultations/consultation-on-financial-thresholds-in-charity-law/outcome/consultation-on-financial-thresholds-in-charity-law-government-response
• ICAEW, New charity financial thresholds: what accountants need to know — https://www.icaew.com/technical/charity-community/articles/new-charity-financial-thresholds-what-accountants-need-to-know
• ICAS, Update on charity financial threshold changes in England and Wales — https://www.icas.com/news-insights-events/news/charities/update-on-charity-financial-threshold-changes-in-england-and-wales
• Charity Commission, The essential trustee (CC3) and Independent examination of charity accounts: guidance for trustees (CC31) — https://www.gov.uk/government/publications/the-essential-trustee-what-you-need-to-know-cc3