Charity SORP 2026: key changes, trustee action and practical compliance tips

The revised Charity SORP applies for periods beginning on or after 1 January 2026, alongside wider updates to UK GAAP under FRS 102. These changes introduce new requirements across income recognition, leases and reporting transparency, meaning trustees and finance teams should be actively preparing now.

Charity SORP 2026: eight key actions for trustees and finance teams

1. Timing of Charity SORP 2026: when the new rules apply and how to prepare

• Applies from your first period starting on or after 1 January 2026
• Early adoption only if both SORP and FRS 102 changes are adopted together

Top tip:
Treat this as a project, not a year-end adjustment. Some changes require early decisions and better data.

Our overview of the revisions to UK GAAP and Charity SORP highlights how these changes sit within the broader FRS 102 update cycle, particularly the move to align more closely with IFRS.

2. Understanding your SORP tier: new three-tier reporting rules

A new three-tier structure determines your disclosure and reporting requirements.

What matters in practice:

• A clear, supportable calculation of gross income
• Annual reassessment of your tier
• SORP tier and Companies Act size operate separately

Watch out:
It’s easy to be compliant with one framework and miss requirements under another.

3. Reporting requirements no longer align neatly

• Audit thresholds, SORP tier and Companies Act size now differ
• Cash flow exemptions depend on both SORP tier and company size criteria

Top tip:
Don’t rely on past conclusions and reassess all three areas.

4. Trustees’ Annual Report changes

The biggest shift is in the quality of narrative, rather than the volume of disclosures.

Key areas:

• Clear articulation of impact, not just activity
• Stronger linkage between reserves policy and actual reserves
• Greater transparency where income (particularly legacies) is recognised ahead of cash
• Increasing expectations around sustainability and wider governance matters – see our guide to ESG reporting requirements in the UK for a broader overview

Top tip:
Identify early what additional information is needed and who will provide it.

5. Revenue recognition: key changes for complex income streams

A more structured model (aligned with FRS 102) is introduced for exchange income.

Areas most likely to be affected:

• Multi-year or performance-based contracts
• Membership models with benefits
• Mixed income arrangements

What to do:
Review income streams and current accounting treatment. The outcome may not change, but the justification will need to be clearer and more robust.

The revised SORP incorporates the five-step income recognition model, bringing greater structure and consistency to how charities assess exchange income. For more detail on the five-step model, listen to our financial reporting episode from our Business Talks podcast.

6. Bringing leases onto the balance sheet under FRS 102

Most leases will now be recognised on balance sheet, in line with FRS 102 updates.

What this means:

• Larger balance sheets
• Changes to expense recognition
• Potential impact on reserves and covenants

Top tip:
Identify all lease arrangements now, including informal or low value ones. Confirm treatment and ensure you have the data needed to apply the new requirements. Make use of the practical expedients available for short-term and low-value leases to reduce complexity where possible.

Watch out:
Not all arrangements that appear to be leases fall within the FRS 102 model. Licences and some peppercorn arrangements may require different treatment.

7. Other SORP changes worth noting

• Social investments simplified into a single category
• Greater transparency in related party disclosures
• Clear distinction between ex gratia and termination payments
• Strengthened guidance on heritage assets

8. Charity SORP 2026 checklist: what trustees should do now

Prioritise the areas most likely to affect your organisation:

• Confirm your reporting period and SORP tier
• Revisit income streams and contracts
• Identify lease arrangements and data gaps
• Plan changes to your Trustees’ Annual Report
• Update accounting policies and internal processes
• Document the basis for key judgements and decisions
• Brief trustees and management
• Seek professional advice where needed

How Saffery can help with Charity SORP 2026 implementation

The introduction of the Charity SORP 2026 brings a number of important changes, from income recognition to lease accounting and enhanced reporting requirements. 

Year-end is challenging enough without layering in new requirements. Some changes will be straightforward; others will need considered judgement. Early planning will help you manage the transition effectively and avoid unnecessary pressure.

Our charities specialists can help you assess the impact, plan your approach and implement the changes with confidence.

We’ve produced a factsheet on this topic which has further guidance and is available on request. If you’d like to receive this or to find out how we can support your organisation, please get in touch with Helen Wilkie.