Charity Commission publishes updated accounting guidance for charities

The Charity Commission has published updated accounting guidance for charities in England and Wales, encouraging trustees and their professional advisers to review the requirements that apply to their charity.

The updated guidance reflects changes and increases to the financial thresholds at which charities must prepare accruals accounts or have their accounts independently examined or audited. The Charities Statement of Recommended Practice (SORP 26): Accounting and Reporting by Charities has been updated to reflect this.

To make the guidance easier to follow, the Commission has published separate guides for the three main types of charity structure:

• Trusts and unincorporated associations
• Charitable companies
• Charitable incorporated organisations (CIOs)

The guidance is intended to help trustees understand their accounting responsibilities and identify the requirements relevant to their charity.

Changes to financial reporting thresholds

For financial years ending on or after 30 September 2026, the government has increased the income thresholds for charities in England and Wales.

The new thresholds are:

• Accruals accounts: The income threshold has doubled from £250,000 to £500,000.
• Independent examination: The threshold has increased from £25,000 to £40,000.
• Audit: The gross income threshold has increased from £1 million to £1.5 million. An audit is also required where gross income exceeds £500,000 and gross assets exceed £5 million.

What should charity trustees do?

Charity trustees and finance teams should familiarise themselves with the updated guidance and check how the changes affect their accounting and reporting obligations.

The Commission has also retained guidance for previous financial years, recognising that some charities will still need to refer to earlier requirements when preparing their accounts.

The updated guidance is available on the Charity Commission website.

If you would like to discuss how the changes may affect your charity, please contact your usual Kreston Reeves adviser, or contact us here.