Big changes are coming to charity accounting and reporting. A revised Statement of Recommended Practice (SORP) — the framework that governs how charities and charitable companies prepare their accounts — is due to be published in autumn 2025 and will apply to financial periods starting on or after 1 January 2026.
If you run a charity or CIC, this isn’t just a technical update. It will affect how you record, present and explain your finances — and how funders, regulators and supporters understand your impact.
Key Dates You Need to Know
Autumn 2025: Final version of the new SORP is expected to be published.
1 January 2026: New SORP becomes mandatory for accounting periods beginning on or after this date.
2026–27: Most charities and charitable companies will submit their first annual accounts under the new SORP.
What Is the SORP and Why Does It Matter?
The SORP (Statement of Recommended Practice) is the rulebook for how charities and charitable companies in the UK must present their accounts. It interprets UK accounting standards (FRS 102) for the charity sector and ensures financial reporting is transparent, consistent and meaningful.
It matters because:
Funders and regulators rely on it to assess your organisation.
Trustees use it to meet their legal responsibilities.
It helps you demonstrate impact and stewardship of funds.
What’s Changing in the New SORP
The full text isn’t published yet, but based on consultation drafts and sector guidance, here’s what we know is coming:
More emphasis on impact reporting: Charities will be expected to link financial activity more clearly to outcomes and public benefit.
Greater clarity on grant income recognition: New guidance will aim to make income recognition more consistent and transparent.
Stronger requirements on reserves and going concern: Trustees will need to explain their reserves policy and sustainability in more detail.
Updated narrative reporting: Annual reports will need clearer explanations of strategy, achievements and future plans.
Digital-ready presentation: The new SORP is likely to support more accessible, digital-first reporting.
We’ll update this guide again once the final text is published in autumn 2025.
How to Prepare Now
Even though the new SORP doesn’t apply until 2026, there are important steps you can take now:
Review your reserves and sustainability policies. These will be under more scrutiny.
Start linking financial reporting to impact. Make sure your annual report tells a clear story of how your spending creates change.
Review income recognition policies. Especially for grants and donations — changes are expected here.
Train trustees and senior staff. Everyone should understand what the new SORP means for your organisation.
Talk to your accountant early. Don’t wait until your 2026 year-end — planning now will make the transition smoother.
Final Thoughts
The new SORP isn’t about more red tape — it’s about improving transparency, consistency and public trust in how charities and social enterprises report their work.
By starting to prepare now, you can make sure your organisation is ready to meet the new standards — and use your annual accounts as a powerful tool to demonstrate your impact.
At Accounting for Good, we’ll be supporting our clients every step of the way — from understanding the new rules to updating accounting policies and trustee reporting. If you want help getting ready, now is the time to start the conversation.