Charity Update November 2025

Key changes in the 2026 Charity SORP

The Charities Statement of Recommended Practice (SORP) 2026 introduces significant updates to charity accounting and reporting in the UK. Effective for accounting periods beginning on or after 1 January 2026, these changes aim to improve transparency, proportionality, and alignment with updated UK accounting standards. Charities with December year ends will be first affected with 31 December 2026 accounts the first to be subject to the new rules.

Below is an overview of the most important changes:

Introduction of a three-tier reporting regime

To ensure proportionality, SORP 2026 introduces a new tiered structure based on income:

Tier 1: Income up to £500,000
Tier 2: Income between £500,000 and £15 million
Tier 3: Income over £15 million

Each tier comes with different disclosure requirements. For example, cash flow statements are now only mandatory for Tier 3 charities, reducing the burden on smaller organisations.

Digital-first reporting and accessibility

With the increasing shift towards digital engagement, the SORP encourages charities to publish annual reports and financial statements in formats optimised for online access. Additional guidance has been provided to ensure these digital documents are fully accessible and adhere to recognised digital accessibility standards.

Enhanced trustees’ annual report

The revised SORP requires charities to provide more comprehensive disclosures regarding the outcomes and impact of their work. Financial reports must now explicitly link the allocation of resources to specific achievements and societal benefits, with the intention of promoting more transparency over how charitable funds are utilised.

As a result, the Trustees’ Annual Report has been significantly expanded. For example:

Impact reporting is now mandatory for all charities
A new sustainability section requires Tier 3 charities to report on environmental, social, and governance (ESG) matters. Tiers 1 and 2 are encouraged to include these disclosures voluntarily
All charities must outline future plans and explain their going concern status, particularly if reserves are low or net assets are negative

Contact Us

James Cowper Kreston is a leading firm of accountants and business advisers, with offices across the South of England. Many of our partners and senior staff are trustees for charitable organisations so have an in-depth understanding of your operations and how to maximise your charities potential.

If you would like to discuss this topic further, then please contact a member of our charities team at James Cowper Kreston.

Kind regards

Alex Peal | Managing Partner

T: +44(0)7771 826264

E: apeal@jamescowper.co.uk