Updated 2026 SORP and threshold changes: What you need to know
The 2026 Statement of Recommended Practice (SORP) has officially been released, introducing significant updates that will impact how charities prepare their financial statements. These changes are designed to improve transparency and ensure consistency across the sector.
The updated SORP will be mandatory for reporting periods beginning on or after 1 January 2026 with charities ending 31 December 2026 being the first fully impacted. Key updates include changes to lease accounting, income recognition, tiered reporting, trustees’ annual reports, and cash flow statements.
Audit threshold changes
To ease the burden on smaller charities, audit and independent examination thresholds will increase:
- Income audit threshold: £1.5 million (up from £1 million).
- Balance sheet audit threshold: £5 million in assets and £500,000 income (up from £3.26 million and £250,000).
- Independent examination income threshold: £40,000 (up from £25,000).
These changes are not expected to come into effect until at least 1 October 2026, and implementation of the changes will be accompanied by updated Charity Commission guidance in due course.
Join our exclusive events series
We are running a series of events designed to walk you through the key changes, what they mean for your organisation, and how to prepare effectively. Our first webinar will walk you through the updates in detail.
Register your interest here, and we’ll send you an invitation shortly.
Date: Tuesday 10 February 2026
Time: 10:00-11:00am
Speaker Panel:
- Luke Holt, Partner, Moore Kingston Smith
- Sally Knight, Governance and Charity Expert, Moore Kingston Smith
Location: Online – Zoom
