The new charities Statement of Recommended Practice (SORP) was published on 31 October 2025 and will apply to accounting periods beginning on or after 1 January 2026.
There’s a lot of detail, but here are our top 5 takeaways:
Income and Lease Reporting: Charities must follow new rules for reporting certain income types and lease arrangements (para 10). The SORP now includes sector-specific examples to help apply changes introduced by the Financial Reporting Council’s update to FRS 102.
Transparency Tiers: Three new tiers set expectations for greater transparency among larger charities:
- Tier 1: Income up to £500,000
- Tier 2: Income between £500,000 and £15 million
- Tier 3: Income above £15 million
Trustees’ Annual Report: There are significant changes, with added guidance on reporting financial reserves and future plans. Topics of public and donor interest—such as impact reporting and ESG (environmental, social, and governance) issues—now have dedicated sections with detailed reporting guidance. See our blog on the new ESG reporting requirements.
Social Investments: Updated rules simplify how charities account for social investments and align the SORP definition with the Charities Act 2011. The previous SORP divided social investments into programme related and mixed motive investments – now it simply refers to social investments. When the Charity Commission updated its Investing Charity Money Guidance in 2023, it dropped these terms because they are covered by the charity law definition of social investment.
Provisions and Contingencies: Reporting requirements have been clarified to make them easier to understand.
Further sources of information and advice:
A free webinar from Charity Finance on 24 November at 2PM.
A number of webinars from Charity Finance Group
If you have any questions please contact Sarah Williams [email protected] and Neil Burton [email protected]
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