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Kreston UK Charities Report 2025

   

Discover the latest insights into the charity sector with the Kreston UK Charities Report 2025! 

Earlier this year, we sent a short survey to clients of the Kreston UK Charity Group. The answers given formed the basis for this report which explores the financial outlook of the charity sector, the challenges and risks being faced, and attitudes surrounding key topics such as diversity, recruitment, digitisation, and sustainability.


The report shows that the charity sector is under pressure on several fronts. Concerns over income streams, including the impact of tight local government finances on service contracts, and the impact of the cost-of-living crisis on personal giving levels are familiar from last year’s report. 

At the same time increases in both the National Minimum Wage and Employers’ National Insurance from April 2025 have created significant inflationary pressures, with 92% of charities reporting staff cost increases compared to the previous year. 


The statistic that is most striking is the impact of the change in government on the sector. Ahead of the July 2024 General Election, 59% of charities thought that a Labour administration would have the greatest positive impact on the charitable sector: almost one year on, 81% of respondents now believe that the new government’s policies will have a negative impact upon their charity. 


You can download a copy of the full report by clicking below.

     

Charity SORP Changes

The long-awaited exposure draft of the new charity statement of recommended practice (the Charity SORP) has finally been published and with it comes a proposal for some major changes in the way charities prepare their financial statements. 


Whilst only an exposure draft at this stage a number of the proposals are in line with changes that are already happening to both international and UK financial reporting so these will happen.

Over recent history a new SORP has been published roughly every 10 years. With the last SORP taking effect in 2015, an update was long overdue, and the exposure draft had been expected for some time. The consultation on the exposure draft closed on 20 June and it is expected that the new SORP will be published in the autumn to take effect from 1 January 2026.


The good news is that this is for financial periods beginning on or after 1 January 2026 so the first full years affected will be entities with a 31 December 2026 year end. However, charities will want to consider the impact in advance of implementation date as the changes could affect anything from reserves policies to banking covenants.

     

Contact Us

James Cowper Kreston is a leading firm of accountants and business advisers, with offices across the South of England. We deliver focused, innovative advice to a diverse range of businesses and individuals helping our clients to maximise their 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

Mike Bath | Partner

T: +44 (0)7557 340691

E: MBath@jamescowper.co.uk

     
   
   

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