The new fraud offence: what charity trustees need to know
By Performance Forensics ·
Since 1 September 2025 large organisations in the UK can be prosecuted if they fail to prevent fraud. Many charities are caught by this offence, yet few trustees have looked closely at what it means for them.
Who does it apply to? The offence applies to incorporated bodies, including charitable companies and charitable incorporated organisations, that meet two of three tests: more than 250 staff, more than £36 million in turnover or more than £18 million in assets. Group figures count, so a charity with a trading subsidiary should look at the whole group.
What does it cover? The offence is narrower than many assume. It covers fraud committed by an employee, agent or other associated person that is intended to benefit the charity. Think of an inflated Gift Aid claim, a grant application that overstates outcomes or an appeal that misleads donors about how their money is used. The charity does not need to have known about it.
Fraud against the charity, such as theft by staff, sits outside the offence although it remains a serious risk in its own right.
The only defence is to show that the charity had reasonable fraud prevention procedures in place at the time. Government guidance sets out six principles: commitment from the top, a documented risk assessment, proportionate procedures, due diligence, communication and training, and monitoring and review.
Where to start? A policy on its own is not enough. Trustees should be able to show that risks have been assessed, that procedures exist and that they have been tested.
If you would like an independent view of where your charity stands, we would be glad to talk.