What are a charity’s reporting obligations to the Charity Commission?

Last reviewed 30th July 2026

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?

1.1.             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:

1. an Annual Return;
2. a Trustees’ Annual Report; and
3. 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.

1.2.             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.

2.1.             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.

2.2.             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.

2.3.             Recent changes to Annual Returns

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.

3.1.             Which method should you use to prepare your accounts?

Charities must prepare their annual accounts using either the receipts and payments method or the accruals method.

The receipts and payments method is simpler but is not allowed by company law; it may only be used by unincorporated charities or CIOs, whose gross annual income is £500,000 or less. However, if they choose to do so, these charities may still use the accruals method of accounting.

All charitable companies, and unincorporated charities or CIOs whose gross annual income is greater than £500,000, must use the accruals method and must comply with the applicable SORP.

3.2.             Should your accounts be audited or independently examined?

Generally, only charities with a gross annual income greater than £40,000 are required to have their accounts independently examined or audited, although small charities may choose to have an independent examination of their accounts provided an audit is not required by their constitution or, for charitable companies, by the Companies Act. (Note that the Charity Commission has the power to require an audit of a small charity in exceptional circumstances.)

An “audit” is an inspection and examination of a charity’s accounts under the Charities Act by a registered auditor. The auditor has to express a professional opinion as to whether the accounts are ‘true and fair’ and they conduct the audit in accordance with relevant auditing standards.

A charity must have its accounts professionally audited if: its gross annual income exceeds £1.5 million; or its gross annual income exceeds £500,000 and the value of its assets exceeds £5 million.

Charities that fall below the thresholds stated above only need to have their accounts examined by an Independent Examiner, unless a professional audit is required under the charity’s constitution or specifically required for that year by the Charity Commission.

An “independent examination” is a simpler and less expensive form of external scrutiny, conducted by an independent person with the requisite ability and practical experience; this does not need to be a qualified accountant. The examiner need only confirm that no evidence has been found that suggests certain things have not been done by the charity.

Charities with a gross annual income of more than £500,000 (but who have assets of below £5m) that have their accounts independently examined must appoint an independent examiner who is a member of a body specified in the Charities Act.

Charitable companies which have either charitable or non-charitable subsidiaries must prepare group accounts where the aggregate income of the group exceeds £1.5 million, and those group accounts must be audited.

We cannot give financial or accountancy advice but are happy to refer you to other specialists in this area as required.

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.

4.1.             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

4.2.             What information should be included in the Annual Report?

4.2.1.      Core information required in a Trustees’ Annual Report

The Trustees’ Annual Report is intended to help people understand what your charity does. The following information is generally required under charity law and applies to all Trustees’ Annual Reports.

• reference and administrative details of the charity (including the charity’s name and address, registration number, its trustees and advisors)
• structure of the charity (including how the charity is constituted and how it recruits its trustees)
• governance and management details (including particulars of the governing document and how the trustees are recruited and appointed)
• summary of the charity’s objectives and activities
• the charity’s main achievements and performance for that financial year
• a financial review, including:
  • where the charity gets its income from
  • how it spends its money
  • information on fundraising practices
  • policy on reserves
  • details of any funds which are materially in deficit, including the circumstances giving rise to the deficit and the steps being taken to eliminate it
• if any funds are held as custodian trustee:
  • a description of the assets held
  • the name and objects of the charity/charities on whose behalf the assets are held and how this activity falls within charity’s own objects
  • details of the arrangements for safe custody and segregation of such assets from the charity’s own assets
• a public benefit statement (i.e. a statement confirming whether the charity trustees have complied with their duty to have due regard to the guidance on public benefit published by the Commission in exercising their powers or duties)

4.2.2.      Additional information required under Charities SORP 2026

Charities subject to a statutory audit (see above) and charities preparing accruals accounts must comply with the relevant requirements of the Charities SORP 2026. Depending on the charity’s tier (see above), this may require additional information to be included in the Trustees’ Annual Report, including the following (non-exhaustive) list:

• Objectives and Activities:
  • Tier 1
    • The charity’s purposes and main activities
    • (For charities in England, Wales and Northern Ireland) how the charity’s activities further its purposes for the public benefit and confirmation that the trustees have had regard to the Charity Commission’s public benefit guidance
    • Contribution of volunteers, where relevant
    • Explanation of the activities, projects and services reported in the accounts
  • Additional information for tier 2 and tier 3 charities
    • Short-term and long-term aims and objectives of the charity and how they relate to one another
    • The activities undertaken and strategies adopted to achieve those aims and objectives

• How the charity measures success and assesses performance against its objectives
• Where material, details of grant-making policies, social investment activities and the contribution of volunteers

• Achievements and Performance
  • Tier 1: Summary of the charity’s main achievements during the year and the difference its work has made to beneficiaries and wider society
  • Tier 2 – in addition to tier 1 requirements
    • How well the charity and any subsidiaries achieved their aims and objectives
    • Report on the impact of the charity’s activities
    • Where material financial investments are held, investment performance review against objectives
    • Comment on the significant factors (both positive and negative) affecting performance during the year and any impact on future plans (such as relationships with employees and the charity’s position in the wider community)
  • Tier 3 – in addition to tier 1 and tier 2 requirements
    • Review of fundraising activities’ performance against fundraising objectives
    • If material expenditure was incurred to raise income, the impact of material fundraising expenditure on present and future fundraising returns

• Financial Review
  • Tier 1
    • Review of the charity’s financial position,
    • Details of any fund or subsidiary undertaking that is materially in deficit and the steps being taken to eliminate that deficit

• Explanation on the charity’s reserves policy, the level of reserves held and the reasons for holding them
• Comparison of reserve levels against the charity’s reserves policy (where applicable)

• • • Details of any material amounts designated or otherwise committed and the likely timing of expenditure
    • If there are significant uncertainties about the charity’s ability to continue as a going concern, disclosure of those uncertainties
  • Tier 2 – in addition to tier 1 requirements
    • Comment on the significant events that have affected the financial performance and position, including principal sources of income and how resources have been applied to support the charity’s objectives
    • Principal risks facing the charity and the plans and strategies for managing these risks
    • If the charity holds significant financial investments, an explanation of the policy adopted for the selection, retention and realisation of investments
    • Explanation of the impact of any material pension liability or material legacy income.
  • Tier 3 – in addition to tier 1 and tier 2 requirements
    • Factors likely to affect the charity’s financial performance or position going forward

• Future Plans
  • Tier 1: Summary of the charity’s plans for the future
  • Tier 2 and tier 3 – in addition to tier 1 requirements
    • The charity’s aims, objectives and planned activities to achieve its future plans
    • Trustees’ perspective of the charity’s future direction

• Structure, governance and management
  • Tier 1: Details of the nature of the governing document, how the charity is constituted and the method used to recruit and appoint new charity trustees
  • Tier 2 and tier 3 – in addition to tier 1 requirements
    • explanation of the charity’s organisational structure, policies and procedures for induction and ongoing training of trustees and how the charity makes decisions (such as the types of decisions taken by the charity trustees and which are delegated to staff)
    • Explanation on the arrangements for setting the pay and remuneration of its key management personnel
    • If the charity is part of a wider network (for example, if it is affiliated with an umbrella group), explanation on whether and how this impacts on the operating policies adopted by the charity
    • explanation of the charity’s relationships with related parties, including subsidiaries and organisations with which it co-operates

• Reference and administrative details:
  • Tier 1: Basic reference and administrative information about its charity and trustees, including names of the charity trustees
  • Tier 2 and tier 3 – in addition to tier 1 requirements
    • Names and address of any other relevant organisations/persons e.g. bankers, solicitors, auditor or independent examiner

• Sustainability
  • Tier 1 and tier 2: sustainability reporting is optional
  • Tier 3: summary of how ow the charity is responding to and managing environmental, governance and social matters

Where consolidated accounts are prepared, the parent charities’ Trustees’ Annual Report should also include relevant information about its subsidiary undertakings.

If the charity is a company, the trustees must also comply with the directors’ report requirements under the Companies Act 2006. However, a separate Trustees’ Annual Report is not required provided that the directors’ report contains all the information required by Charities SORP 2026. In practice, charities will often prepare a single report that satisfies both the charity law and company law reporting requirements.

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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.