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The date that matters is the start of your accounting year
The updated Charities SORP 2026 applies to charities preparing accruals accounts for periods beginning on or after 1 January 2026. It is not simply a new form to complete when accounts are due. For a charity with a January-to-December year, the new rules apply to its 2026 accounts. A charity whose financial year began in autumn 2025 will normally move across in its next accounting period. If you prepare receipts-and-payments accounts rather than accruals accounts, ask your accountant which reporting requirements apply to you rather than assuming every SORP change affects your charity.
Why trustees should care
Accounts are not just an accountant’s document. They explain where money came from, how it was spent and whether the organisation can continue its work. Changes to the reporting framework may affect the information your team needs to collect during the year. Leaving that conversation until the accounts are drafted can mean a scramble for contracts, lease details or explanations of funding arrangements that nobody thought to retain.
Three areas worth discussing now
The 2026 SORP introduces three reporting tiers intended to make requirements more proportionate to charity size. It also updates accounting treatment for income and leases. That matters if your organisation has complex grant or contract arrangements, rents premises or equipment, or has commitments extending across financial years. Ask your accountant which tier applies to your charity and whether any of its current accounting policies or disclosures need to change. Avoid relying on a checklist written for a much larger organisation, but do not assume a smaller charity has nothing to do.
Your trustees’ report still needs to tell the story
A clear trustees’ annual report connects the financial statements to the charity’s activities, achievements, risks and plans. It should explain important financial decisions in ordinary language. If you hold significant reserves, readers should understand why. If your charity depends heavily on one grant or contract, explain the risks and what the board is doing about them. The figures and narrative should agree: an upbeat report beside a cash-flow warning will prompt more questions than confidence.
Build the right conversation into your next board meeting
Ask your finance lead for a short transition note: which rules change for us, what extra information do we need, who will collect it and when? Review how income restrictions, lease commitments and designated funds are recorded. If your charity is growing, check whether its financial systems and the time allocated to bookkeeping have kept pace. A little preparation now is much less painful than reconstructing a year’s transactions later.
Make the accounts useful, not merely compliant
Trustees should receive management information throughout the year that helps them make decisions, not wait for statutory accounts several months after year-end. A monthly view of cash, restricted funds, budget differences and upcoming commitments can be far more useful than a beautifully presented annual report arriving too late to influence events. The new framework is a useful reason to review what your board actually needs to see.
Know a charity preparing for its first year under SORP 2026? Share this article with its treasurer or trustees, or explore MH360’s accountancy support.
