There have been changes to the reporting and accounting requirements that apply to charities. These updates include a revision to the Charities Statement of Recommended Practice, known as Charities SORP 2026, and revised incomes threshold under the Charities Act used to determine a charity’s reporting and accounting obligations. Some of these changes are already in force, with further changes taking effect from 30 September 2026.
As some of the financial thresholds have increased, some charities may be able to benefit from simpler reporting requirements. Trustees are encouraged to take the opportunity to review their charity’s reporting arrangements and ensure they understand how the changes affect their charity.
The reporting and accounting requirements that apply to a charity will depend on a number of factors, including whether the charity is exempt or excepted from registration, whether it is a company, its gross annual income and the value of its assets. The sections below consider each of these factors in turn and summarise the requirements that apply from 30 September 2026.
(Note that this Article only deals with a charity’s obligations to report to the Charity Commission and does not set out the additional obligations on charitable companies under the Companies Act.)
1. Is your charity registered, excepted or exempt from registration?
Registered Charities
Generally, if a charity’s income is greater than £5,000 per year, it must register with the Charity Commission (unless it is an excepted charity – see further below).
All registered charities must produce the following for the Charity Commission:
- an Annual Return;
- a Trustees’ Annual Report; and
- Annual Accounts (there are different types of accounts and trustees will need to be clear which they should submit, and whether the accounts should be independently examined or audited).
The Annual Report and Annual Accounts must be filed with the Charity Commission within 10 months of the end of the charity’s financial year.
Excepted Charities (may apply to some churches)
Since 31 January 2009, all excepted charities with an annual income in excess of £100,000 have been required to register with the Commission. The accounting and reporting requirements for an excepted charity which is registered with the Commission are the same as for any other registered charity.
An excepted charity with an annual income below £100,000, does not have to register with the Commission and does not have to submit Annual Reports and Accounts.
However, it must still produce annual accounts and must provide copies to the public upon request. Excepted charities with a gross annual income of more than £40,000 will generally need to have their accounts independently examined or audited (see threshold requirements below).
The Commission also recommends that excepted charities produce an Annual Report and may direct the trustees to prepare and submit a Report in exceptional circumstances.
If an unregistered, excepted charity is also a charitable company, it must comply with any requirements for filing under the Companies Acts.
2. Annual Returns
All registered charities are sent an annual return form by the Commission shortly after the end of their financial year end which should be completed and returned online. The following registered charities are under a legal duty to complete and file an Annual Return:
- has a gross annual income greater than £10,000; or
- is a charitable incorporated organisation (“CIO”) (irrespective of its gross annual income).
If the charity’s gross annual income is less than £10,000, it may be asked to complete certain sections of the annual return, e.g. trustees details.
Charities with a gross annual income of more than £25,000 should file their Annual Return, Trustees’ Annual Report and the Annual Accounts at the same time.
What information should you include in the Annual Return?
The Annual Return provides the Commission with a snapshot of the charity’s finances and governance, and details of contacts and the charity’s activities. The Annual Return must include the following:
- Charity information – confirmation of details appearing on the extract from the Register of Charities on the Commission’s website.
- Financial information – details of total income and spending.
- Serious incidents report – trustees must sign a declaration that there were no serious incidents over the previous financial year that they should have brought to the Commission’s attention but have not done so.
How do you file the Annual Return?
The Annual Return should be filed online (you will need your charity registration number and password). Failure to do so will result in the charity’s details being marked as ‘overdue’ which can put off potential donors, funders or volunteers.
The Charity Commission periodically updates the information that trustees are required to provide about their charity in the Annual Return. See Charity Annual Return 2025 and 2026: question guide for the latest requirements Charity Annual Return 2025 and 2026: question guide – GOV.UK.
3. Annual Accounts
All charities (whether registered with the Charity Commission or not) must keep accounting records and prepare annual accounts which must be made available to the public on request.
Registered charities with a gross annual income greater than £25,000 and all CIOs (regardless of income) need to file their accounts with the Commission.
4. Trustees’ Annual Report
All registered charities must prepare an Annual Report and make it available to the public upon request, but they only need to file the report if the charity’s annual income is more than £25,000.
All CIOs, irrespective of gross annual income, must complete and file an Annual Report.
The amount of information required in a Trustees’ Annual Report will depend on the size and legal structure of the charity. This will determine whether you need to provide the additional information under Charities SORP 2026 and, if so, the level of detail.
Do you need to comply with Charities SORP 2026?
Charities that prepare their accounts on accruals basis must comply with Charities SORP 2026 when preparing their Trustees’ Annual Report. See section 3.2 above for charities that must prepare its accounts on this basis.
Trustees’ Annual Reports prepared under Charities SORP 2026 are subject to more extensive reporting requirements than those prepared by charities that are not required to comply with the Charities SORP 2026. However, the additional requirements generally expand on the same core areas of reporting, including the charity’s structure, activities, governance, finances and public benefit.
Charities SORP 2026 groups charities into three tiers based on income. The level of detail required in the Trustees’ Annual Report will vary depending on the charity’s tier, with charities in Tier 2 and Tier 3 generally being required to provide more detailed reporting (see further below):
- Tier 1: up to £500,000
- Tier 2: £500,000 to £15 million
- Tier 3: over £15 million
Detailed information about what should be included in your annual report can be found here.
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This information has been provided by solicitors working for Edward Connor Solicitors. It is designed for the purpose of knowledge sharing only and does not constitute legal advice.
