After 1 January, only charities with annual turnovers of more than £15m will have to produce a detailed cashflow statement

New accounting rules for charities in the UK have been published.

How they apply to organisations will vary depending on their income, according to the new Charities Statement of Recommended Practice (SORP).

For accounting periods beginning after 1 January 2026, only charities with annual turnovers of more than £15 million will be required to produce a detailed statement of cashflow.

Following a consultation earlier this year, there will be less stringent requirements for charities with incomes over £500,000 and the lightest touch rules for smaller voluntary organisations.

In finalising the new accounting framework, the charity regulators across England and Wales, Scotland and Northern Ireland (who together make up the SORP-making body) have balanced a desire for simplicity and clarity for charities with the importance of transparency for donors and interested third parties.

The new SORP includes refreshed annual report requirements for trustees, with further guidance added on how to report financial reserves and plans about the future.

It has added dedicated sections for areas of public and donor interest including impact reporting, environmental, social and governance issues with associated guidance on reporting.

There are also updates to how charities should account for social investments, designed to align with the definition of such holdings in the Charities Act 2011.

The new SORP also aims to make requirements for reporting provisions and contingencies easier to understand.

See below for a breakdown of key changes.

Scottish Charity Regulator (OSCR) Head of Regulation, Alex Wright, said: "The updated Charities SORP represents a major advance in delivering transparency and proportionality for charity reporting in Scotland and across the UK. The new guidance, which has been developed following an extensive consultation process, introduces tailored, more proportionate reporting requirements for charities of all sizes, and enhanced requirements for reporting on income, leases, and social investments.

"We know that good governance of charities is essential to maintaining public trust. That's why the updated requirements place greater emphasis on reporting the impact charities have on society, as well as enhanced reporting around environmental, social, and governance issues. All of this will improve transparency of registered charities and increase public trust in individual organisations and the wider charity sector.

"The new requirements are proportionate and practical, particularly for smaller charities, while maintaining the high standards expected by the public. The SORP comes into effect for financial periods beginning on or after 1 January 2026, and we encourage all charities to review the guidance and prepare for these important changes now."

Key changes: a breakdown

The SORP update, which will take effect for accounting periods starting on or after 1 January 2026, includes:

1. New requirements for how charities should report on certain types of income and lease arrangements. The SORP now includes charity sector specific examples to assist charities in applying new requirements introduced by the Financial Reporting Council’s update to Financial Reporting Standard 102.
2. Three new tiers that set out expectations for increased transparency for the largest charities:
   • Tier 1 – for charities with income up to £500,000
   • Tier 2 - for charities with income between £500,000 - £15 million
   • Tier 3 - for charities with income above £15 million
3. Refreshed Trustees Annual Report requirements, with further guidance added on how to report financial reserves and plans about the future. Areas of particular public and donor interest – including impact reporting, environmental, social and governance issues – now have dedicated sections, with associated guidance on reporting.
4. Updates to how charities should account for social investments, making it simpler for charities to report on such holdings and aligning the definition of social investments in SORP with the definition in the Charities Act 2011.
5. Easier to understand requirements for reporting provisions and contingencies.

Visit the OSCR website for more details.