If you’re in the charity sector, you’ve probably heard of the Charity SORP, but if you haven’t, no worries, as we’re covering the upcoming changes in 2026 in this article. Whether you’re running a local community group or a national organisation, it’s worth a look. Why? Because these changes are going to affect how charities report their finances from the 1st of January onwards.
Here is a quick breakdown of everything you need to know (in a waffle-free way).
New tiers to simplify reporting
One of the biggest changes in Charity SORP 2026 is the introduction of three shiny new tiers based on your charity’s income. Why? Because it’s a bit silly to ask a small food bank to produce the same report as a multi-million-pound international NGO. Now, the idea is to make reporting more proportionate to the size of your charity.
Here’s how it breaks down:
- Tier 1: Income up to £500k
- Tier 2: Income from £500k to £15m
- Tier 3: Income over £15m (aka “the big leagues”)
Each tier comes with different reporting requirements so that, in theory, smaller charities don’t have to jump through the same flaming hoops as the bigger ones. But this “less faff” approach is yet to be tested! If you’ve ever muttered, “Why is this so complicated?” while doing your annual report, hopefully, help is on the way!
A new look for Trustees’ Annual Reports
The Trustees’ Annual Report is getting a makeover, too, so expect clearer guidance on:
- Reserves: how much you’re holding and why
- Future plans: what’s next for your charity
- ESG (Environmental, Social, Governance): yes, your donors want to know you care about the planet
The aim is to make charity reports more relevant, transparent, and useful to readers (including supporters, funders and regulators).
Changes to income, leases, investments and more
The Charity SORP 2026 brings new rules for recognising income and managing lease arrangements. That might sound a bit dry (and it is), but there’s no need to panic; there will be practical examples to help you navigate the changes.
There’s also a simplification of how to account for social investments, provisions, and contingencies. Which is good news because, let’s face it, the world’s complicated enough already.
Threshold increases
There’s more change coming, and it’s all in favour of smaller charities.
From accounting periods ending on or after 30 September 2026, the following changes kick in:
- Independent examination threshold rises from £25k to £40k
- Professional examiner requirement kicks in at £500k (previously £250k)
- Receipts and payments accounts can be used up to £500k
- Audit threshold increases to £1.5m income or £5m assets
- Group accounts only required above £1.5m income threshold
So yes, more charities will fall into the less-regulated category, meaning fewer headaches and lower costs.
Why it matters now
You might be thinking, “Great, but this doesn’t apply until 2026, why worry now?”
Fair question, but planning ahead will save you from any nasty surprises later. These changes might affect your systems, your policies, and even your governance structures. And if you’re approaching the income thresholds, it could mean a significant change in your reporting obligations. Now is the perfect time to review where you stand.
International Not for Profit Accounting Standard
But don’t get too comfy over this-in other equally scintillating news- the INPAS accounting standard was launched in October 2025. It doesn’t automatically come into force in the UK and may well take a while to percolate down to be in the UK’s accounting framework. But more change is on its way.
Don’t fancy doing it yourself? You don’t have to!
We’re already helping charities prepare for Charity SORP 2026 changes, and we can do the same for you. Whether you need a quick chat, a full accounts overhaul, or just someone to translate the latest regulations into plain English, JVCA the friendly accountants are here to help.
| Ready to get sorted ahead of the changes? Get in touch and book a charity accounts review with us today. |
