All charities urged to check new rules for accounting for 2026
The Charity Commission for England and Wales is urging all charity trustees and professional advisers to read its updated guidance due to changes that apply from this year.
Research for the regulator indicates financial transparency underpins public trust and confidence in the £100 billion charities in England and Wales expend delivering impact, so it is vital registered charities continue to submit accurate information on time.
As charities have different accounting requirements based on their legal structure, there is now one guide for each of the three main structure types: a trust or an unincorporated association; a charitable company; a charitable incorporated organisation (CIO).
The guidance has also been updated to reflect two main changes. Firstly, to the Charities Statement of Recommended Practice: Accounting and Reporting by Charities (‘the SORP’); secondly to the income thresholds in charity law at which charities must follow the SORP and have their accounts examined or audited.
The new version of the SORP applies to charities across the UK for financial years starting on or after 1 January 2026 which includes new requirements for recognising and reporting on certain types of income and lease arrangements, and new expectations for increased transparency from big income charities.
Crucially, for charities in England and Wales, for financial years ending on or after 30 September 2026 the government has raised the income thresholds at which charities must prepare SORP-compliant accruals accounts and / or have their accounts examined or audited. The new income thresholds are:
- above £500,000 for preparing accruals accounts, doubled from £250,000 previously
- above £40,000 for having accounts checked by an independent examiner, increased from £25,000
- either above £1.5m gross income or gross income above £500,000 and gross assets over £5 million for an obligatory audit, increased from £1m
Charity Commission Senior Trustee Guidance Manager, Sue Smith, said:
You may need to prepare your accounts differently this year as there are some changes to the accounting requirements for charities in England and Wales. Our refreshed guidance sets out clearly what to do, step by step.
We’ve also listened to feedback and made our guidance easier for trustees – and their professional advisers – to use and find the relevant information for their charity.
Guidance for previous financial years remains available on gov.uk for the time-being, as charities may need to refer to this in compiling their accounts.
Longer-term, the Commission will be considering a range of options for making accounting for charities fit for the future.
Charity Commission Assistant Director of Accountancy, Amie Woods said:
Charity trustees have stewardship of around £100 billion of charitable money and people want to see how those funds are being spent to do good. Accounts and annual returns provide that essential information and by far the majority of charities submit these to the Commission on time. This builds public trust and confidence in charity.
Our guidance should help charities continue to get it right under the current system. However, the rules for compiling accounts are complex so in the longer-term we want to explore if there are other ways to make it more straightforward for charities. It’s not just about cutting red tape, it’s about getting the right balance between reducing the burden on charities whilst maintaining accountability and protecting public trust.
The Commission publishes a range of guidance and policies to help trustees fulfil their duties. The complete list is available on gov.uk and includes improving your charity’s finances (CC12) and accruals accounts packs.
ENDS
Notes to editors
- All charities must prepare accounts and registered charities must also prepare a trustees’ annual report. These must be available to the public on request.
- The updated guidance is available in the collection: Charity accounts, financial reporting and tax - GOV.UK. This includes guidance on preparing accounts for a previous financial years.
- If your charity also operates in Scotland, read guidance on the accounting rules for Scottish charities you must also follow.
- If your charity is registered in Northern Ireland, you can read the Charity Commission for Northern Ireland’s guidance on annual reporting here: Annual reporting CCNI
- The smart answer tool Prepare a charity’s annual accounts will be updated with the new income thresholds that come in effect at the end of September 2026 for charities in England and Wales.
- The Charities Statement of Recommended Practice (SORP) is developed collaboratively by charity regulators across England and Wales, Scotland, and Northern Ireland, observed by the Charity Regulator in Ireland. It is a framework for charity accounting and reporting. 1 January 2026 is the date from which the Charities Statement of Recommended Practice 2026 (SORP 2026) applies. Your charity may have to produce accounts that comply with SORP 2026, or a sector specific SORP. For example, registered providers of social housing will need to comply with the Housing SORP.
- The Commission’s latest research into Public trust in charities 2026 found that “donations reaching the end cause” remains the top selected driver of trust with “it being easy to see how much the charity has raised, and how this money has been spent” ranked third.
- The analysis of the annual return for 2024 – the last year for which there is a complete record of sector income – indicated £100.86 billion was expended by charities delivering positive societal impact in 2024.
Press office
Email pressenquiries@charitycommission.gov.uk
Out of hours press office contact number: 07785 748787