Guidance

Charity accounts: rules for Charitable Incorporated Organisations (CIOs)

Updated 16 September 2026

Applies to England and Wales

Read guidance about what accounts your charity must prepare for financial years beginning on or after 1 January 2026.

Read this guidance if your charity is a Charitable Incorporated Organisation (CIO).

Read different guidance if your charity is:

• a trust or unincorporated association
• a charitable company
• an exempt charity

If your charity also operates in Scotland, read guidance on the accounting rules for Scottish charities you must also follow.

The Charities Statement of Recommended Practice (SORP) gives 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.

This guidance also sets out new accounting thresholds which apply for financial years ending on or after 30 September 2026.

If you are preparing accounts for a previous financial year, read the appropriate guidance.

1. The basic accounting and reporting rules

As a trustee you must make sure your charity is accountable. This is one of your legal duties. The trustee body as a whole is responsible for your charity’s financial management. Use this guidance to help you understand the type of accounts CIOs must prepare, and for the information about trustees’ annual reports.

These are the basic rules:

• all CIOs must prepare accounts and a trustees’ annual report
• all CIOs must keep financial records such as cash books, invoices, receipts and Gift Aid records for at least 6 years
• all CIOs must comply with anything their governing document says about financial management
• all CIOs must make their accounts and annual report available to the public on request. You can charge to cover your costs
• all CIOs must submit information yearly to the Charity Commission. Read guidance to find out what information your charity needs to submit

There may be other rules your charity must comply with. Read guidance on tax exemptions for charities and on tainted charity donations.

Get professional advice if you need help to prepare your charity’s accounts or trustees’ annual report.

2. What type of accounts to prepare

There are two types of accounts: receipts and payments accounts and accruals accounts.

The type of accounts you must prepare depends – for most charities - on the charity’s annual gross income. 

2.1 What are receipts and payments accounts

Receipts and payments accounts consist of:

• a statement of receipts and payments showing the movement of cash into and out of the charity during the financial year, and
• a statement giving details of its assets and liabilities (amounts owed to other people and organisations) at the end of the financial year

CIOs must provide specific notes to receipts and payments accounts to give details of:

• any guarantees given by the CIO where there may be a liability arising at the period end date; and
• any debts secured by a charge on the CIO’s assets at the period end date

You can use this receipts and payments template.

Your charity can choose to prepare accruals accounts, or your governing document or a funder may require your charity to prepare accruals accounts.

2.2 What are accruals accounts

Accruals accounts must give a true and fair view. They must contain:

• a balance sheet showing the charity’s financial position at the end of the financial year, and
• a statement of financial activities which shows for that financial year:
  • all money received or due to the charity, and
  • all money spent or incurred by the charity, and
• explanatory notes

Make sure your accounts are true and fair by complying with SORP. If your CIO is preparing accruals accounts for financial years beginning on or after 1 January 2026, your accounts must comply with SORP 2026, or a sector specific SORP. For example, registered providers of social housing will need to comply with the Housing SORP.

For charities complying with SORP 2026 the amount of detail you provide will depend on what tier you are in.

2.3 What does gross income mean

For most charities, the type of accounts you prepare depends on your charity’s annual gross income for the financial year in question.

Use the information in your charity’s accounting records to work out the gross income.   

2.4 Gross income

For charities preparing receipts and payments accounts

Gross income is the total receipts recorded for the financial year in the statement of receipts and payments excluding:

• proceeds from the sale of investments or fixed assets
• the receipt of any endowment funds
• loans received in the financial year

Endowment funds are funds received by the charity to be held as capital and used for the charity’s purposes. This includes permanent endowment which is property your charity must keep rather than spend.

Expendable endowment is a capital fund which allows the trustees to convert the fund to income.

For charities preparing accruals accounts

Gross income is the total income as shown in the Statement of Financial Activities for all funds excluding the receipt of any endowment funds, as explained above.

You must include any endowment funds which have been transferred to income funds during the year and are now available for spending.

2.5 Receipt and payments accounts thresholds

For financial years ending before 30 September 2026

You can prepare receipts and payments accounts if your CIO’s gross income is £250,000 or less - unless your governing document says you must prepare accruals accounts or you choose to.

For financial years ending on or after 30 September 2026

Your CIO can prepare receipts and payments accounts if its gross income is £500,000 or less - unless your governing document says you must prepare accruals accounts or you choose to.

2.6 Accruals accounts thresholds

For financial years ending before 30 September 2026

You must prepare accruals accounts if your CIO’s gross income is more than £250,000.

You must prepare group accounts if your CIO has one or more subsidiaries and the combined gross income of the group (after removing any transactions between any of the organisations in the group) is more than £1 million. These must be accruals accounts.

A subsidiary is an organisation that the charity owns and controls, for example a trading company.

For financial years ending on or after 30 September 2026

You must prepare accruals accounts if your CIO’s gross income is more than £500,000.

You must prepare group accounts if your CIO has one or more subsidiaries and the combined gross income of the group (after removing any transactions between any of the organisations in the group) is more than £1.5 million. These must be accruals accounts.

A subsidiary is an organisation that the charity owns and controls, for example a trading company.

Read an example of how charities could benefit from this threshold change.

3. When accounts need an independent examination or audit

These are checks to provide an independent review of the charity’s accounts.

3.1 Independent examination

An independent examination is a less in depth review than an audit. It is often chosen by smaller charities and focuses on ensuring accounts match the charity’s records.

For financial years ending before 30 September 2026

Gross income £25,000 or less	There is no requirement to have an independent examination or audit - unless your governing document or a funding agreement requires one or the other.
Gross income over £25,000 and up to £1 million	You can choose to have either an independent examination or an audit - unless your governing document or a funding agreement requires an audit.
Gross income over £250,000 and up to £1 million	If you have an independent examination this must be carried out by a member of a body specified under the Charities Act 2011.

For financial years ending on or after 30 September 2026

Gross income  £40,000 or less	There is no requirement to have an independent examination or audit - unless your governing document or a funding agreement requires one or the other.
Gross income over £40,000 and up to £1.5 million	You can choose to have an independent examination or an audit - unless your governing document or a funding agreement requires your charity to have an audit.
Gross income over £500,000 and up to £1.5 million	If you have an independent examination this must be carried out by a member of a body specified under the Charities Act 2011.

Read guidance on independent examination.

Read an example of how charities could benefit from these threshold changes.

3.2 Audit

An audit is an in-depth review of the charity’s accounts and gives an opinion on whether the accounts are true and fair.

For financial years ending before 30 September 2026

Gross income more than £1 million or Gross income more than £250,000 and gross assets more than £3.26 million	You must have an audit by a registered auditor.
If your charity must prepare group accounts	You must have an audit by a registered auditor.

For financial years ending on or after 30 September 2026

Gross income more than £1.5 million or Gross income more than £500,000 and gross assets more than £5 million	You must have an audit by a registered auditor.
If your charity must prepare group accounts	You must have an audit by a registered auditor.

You can search for an auditor on the Register of Statutory Auditors.

The Charity Commission can require an audit of your charity’s accounts in cases where there may be misconduct or mismanagement.

4. Preparing group accounts (also known as consolidated accounts)

Read this section if your charity is a parent charity and has one or more subsidiaries.

A subsidiary is an organisation that the parent charity owns and controls, for example a trading company.

‘Group’ means the parent charity and all the subsidiaries.

All charities in a group must prepare individual accounts.

4.1 For financial years ending before 30 September 2026

Gross income of the group exceeds £1 million after removing any transactions between organisations in the group	The parent charity must prepare accruals accounts and must comply with SORP 2019 (or SORP 2026 if trustees have chosen to adopt it early). The accounts must be audited by a registered auditor.
Gross income of the group is £1 million or less	You can choose to prepare group accounts. These are known as ‘non statutory accounts’ as there is no legal requirement to prepare them. They can only be filed with the Charity Commission if certain requirements are met.

4.2 For financial years ending on or after 30 September 2026 

Gross income of the group exceeds £1.5 million after removing any transactions between any of the organisations in the group	The parent charity must prepare accruals accounts which must comply with SORP 2026. The accounts must be audited by a registered auditor.
Gross income of the group is £1.5 million or less	You can choose to prepare group accounts. These are known as ‘non statutory accounts’ as there is no legal requirement to prepare them. They can only be filed with the Charity Commission if certain requirements are met.

5. Trustees’ annual report

Trustees of all charities must produce annual accounts and trustees of all registered charities must also prepare a trustees’ annual report.

The annual report is an important milestone, an opportunity to take stock of how the year has gone compared to your plans. The report is a chance to bring the accounts to life, help you celebrate successes and explain any challenges and your future plans.

All charities must include basic information which is mandatory. Charities preparing receipts and payment accounts provide less information. For charities preparing accruals accounts the amount of detail you provide will depend on what tier you are in for the purposes of SORP 2026.

Find out what information to put in your trustees’ annual report.

6. Using electronic signatures

An electronic signature can be a typed or a scanned version of a handwritten signature.

Check your charity’s governing document and follow what it says about using handwritten or electronic signatures.

If it does not say anything, you can use electronic signatures for documents like balance sheets, accounts, trustees’ annual reports and the independent examiners’ report.

This includes copies you keep, and copies (of accounts and annual reports) you send to the Commission. 

7. Including personal information in your accounts and annual report

The Charity Commission publishes charity accounts and annual reports on its register and they are accessible to everyone.  The Commission cannot remove personal data and can only redact data in very limited circumstances.

You must comply with UK GDPR rules on publishing personal information. Check carefully that any personal data you include in your accounts and annual report is necessary, fully justified and not excessive. 

See our annual return privacy notice for information on what personal data to include in your annual return and accounts and how the Charity Commission processes this.

8. Examples

The new accounting and reporting changes apply to financial years ending on or after 30 September 2026. Below are some examples of how charities could benefit from the changes.

These examples assume that there is nothing in the charity’s governing document which says what type of accounts the charity must prepare or whether the accounts must be audited or independently examined.

Example 1

Charity A is a CIO and has a financial year ending on 31 January. For the financial year ending 31 January 2026, the charity had a gross income of £358,000, Under the thresholds that apply for that financial year, the trustees had to prepare accruals accounts.

For the financial year ending 31 January 2027, the trustees anticipate their gross income will be £437,000. Under the new thresholds which apply for financial years ending on or after 30 September 2026, the trustees can choose to prepare receipts and payments accounts or accruals accounts.

Example 2

Charity B is a CIO and has a financial year ending on 31 October. It had a gross annual income of £35,000 for the financial year ending 31 October 2025.  Under the thresholds that apply for that financial year, the trustees must have the accounts independently examined.

The trustees anticipate the charity’s income for the financial year ending on 31 October 2026 will be between £35,000 and £38,000. Under the new thresholds which apply for financial years ending on or after 30 September 2026, they do not have to get the accounts independently examined.

Example 3

Charity C is a CIO with a financial year ending on 30 September. For the financial year ending 30 September 2025 the charity had a gross income of £325,000. Under the thresholds that apply for that financial year, the trustees had to get the accounts examined by a professionally qualified examiner.

For the financial year ending 30 September 2026, the trustees anticipate the gross income for the year will be £315,000. Under the new thresholds, which apply for financial years ending on or after 30 September 2026, the accounts must be examined by an independent examiner, but this does not need to be done by a professionally qualified examiner.

9. Further guidance

Find out what information you need to send to the Charity Commission.

This table sets out all the accounting thresholds before and after 30 September 2026.

Use this accounts tool if you need further help to understand what accounts to prepare.

10. Legal note

The requirement to produce accounts is in section 132 of the Charities Act 2011.

The requirement to prepare group accounts is in section 138 of the Charities Act 2011 and The Charities Act 2011 (Group Accounts) Regulations 2015.

The power for the Charity Commission to dispense with the requirement for accounts to be audited or independently examined is in section 154 of the Charities Act 2011 and The Charities (Accounts and Reports) Regulations 2008.

Read guidance on dispensations.

The requirement to prepare and submit an annual report is in section 162 of the Charities Act 2011.

The requirement for CIOs to provide information in the notes to receipts and payments accounts about outstanding guarantees and debts is in Regulation 62 of The Charitable Incorporated Organisations (General) Regulations 2012.

The option to obtain an independent examination over an audit is in section 145 of the Charities Act 2011

If you choose an independent examination (read relevant guidance above), the independent examiner must be a member of a body specified under the Charities Act 2011. They are:

• a fellow of the Association of Charity Independent Examiners
• a Member of the Institute of Chartered Accountants in England and Wales
• a Member of the Institute of Chartered Accountants of Scotland
• a Member of the Institute of Chartered Accountants in Ireland
• a Member of the Association of Chartered Certified Accountants
• a Member of the Association of Authorised Public Accountants
• a Member of the Association of Accounting Technicians
• a Member of the Association of International Accountants
• a Member of the Chartered Institute of Management Accountants
• a Member of the Institute of Chartered Secretaries and Administrators
• a Member of the Chartered Institute of Public Finance and Accountancy
• a Member of the Institute of Financial Accountants
• a Member of the Certified Public Accountants Association

The requirement for CIOs that the statement of financial activities and balance sheet must be prepared so as to give a true and fair view is in Regulation 8 (4) of the Charities (Accounts and Reports) Regulations 2008.

UK Generally Accepted Accounting Practice (GAAP) provides the route map to preparing accruals accounts on a true and fair basis. If any alternate approach is adopted the onus is on the preparer to demonstrate why following GAAP would lead to the accounts prepared not being true and fair and to demonstrate how their alternative approach is necessary for true and fair. GAAP does make provision for particular circumstances where a departure from GAAP is necessary for a true and fair view and an alternative treatment for an item has to be adopted but it then requires the preparer to explain their alternate approach and make certain disclosures in the notes to the accounts.

The role of a SORP is to provide application guidance for charities preparing accruals accounts in accordance with GAAP. A SORP is not an accounting standard in its own right. When GAAP changes a new SORP is issued. When GAAP changes any previous SORP does not apply for reporting periods subject to the new GAAP.

Regulation 8 (5) of the 2008 Regulations makes reference to preparing accruals accounts in accordance with the methods and principles of the SORP. Although Regulation 2 defines the SORP as the Statement of Recommended Practice for Accounting and Reporting by Charities (SORP 2005), the over-arching requirement is to prepare the accounts to give a ‘true and fair’ view. It is therefore reasonable for preparers to conclude that where there is an apparent clash of legal requirements with the applicable GAAP, the requirement to prepare accounts to give a ‘true and fair’ view necessarily requires adherence to the applicable GAAP and this over-rides the failure of the regulations to have been updated to correctly define the SORP that is to be followed.

SORP 2026 provides application guidance for new GAAP so although the regulations have not been updated to define the SORP that is to be followed, it is reasonable to conclude that it is necessary to follow SORP 2026 for accruals accounts to give a true and fair view.