SORP 2026: New requirements for impact reporting
From 1 January 2026, the new Charity Statement of Recommended Practice (SORP) comes into effect. The revised SORP aims to make financial reporting more proportionate, transparent, and aligned with modern standards. Below is a short, straightforward guide to help your charity prepare.
Step 1: Confirm your tier
The first action for all charities is to determine which SORP reporting tier you fall into—based on projected income:
| Tier | Income Level |
| Tier 1 | Up to £500,000 |
| Tier 2 | £500,000 – £15 million |
| Tier 3 | Over £15 million |
Most small and medium charities will fall into Tier 1 or Tier 2.
Your tier determines the level of detail required in both your Accounts and your Trustees’ Annual Report. The revised SORP aims to reduce complexity and burden for Tier 1 and 2 charities through simpler requirements and more precise guidance.
Step 2: decide whether you need an audit or an independent examination
These thresholds have increased from Jan 2026
| Requirements | New Threshold (from Jan 2026) |
| Independent Examination | Up to £40,000 (previously £25,000) |
| Full Audit Required | From £1.5 million income (previously £1million) |
Important: You must consider total assets, as well as income, when deciding whether an audit is required. Some charities may still choose to have a full audit to support transparency and accountability. This is a trustee decision.
Other key financial changes
There will be a need for clearer expectations around:
- Reserves policy
- Risk management
- Future plans
- Leasing accounting
- Income recognition
These may affect your charity differently, so it is advised to seek advice from your accountant or financial advisor to ensure compliance.
Impact reporting becomes mandatory
Impact reporting is no longer a “nice-to-have”; it is now essential for all charities preparing accruals accounts.
Funders, partners, and the public increasingly want to understand not just what charities do, but what difference it makes. From SORP 2026 onwards, every charity must include an impact section in its Trustees’ Annual Report.
What this means in practice
| Tier | Impact Reporting Requirements |
| Tier 1 | Basic explanation of achievements and the difference made. |
| Tier 2 and 3 | More detailed narrative, including metrics where practical |
| All tiers | Volunteers’ contributions must be acknowledged (e.g. hours and roles) |
| All tiers | Future plans for the coming year must be outlined. |
Key Tip: Impact reporting should be proportionate—it does not need to be complex. But it must be meaningful.
Simple ways to evidence your impact
You don’t need expensive systems or long reports. Focus on:
- Telling the story of your achievements
- Numbers served & feedback
- Case studies & quotes
- Acknowledging the contribution of volunteers
- Outlining your plans for the year ahead
How can we support your charity
Many charities feel overwhelmed by the reporting requirements or worry that it will be costly. Our service is designed specifically for small and medium charities, offering affordable, practical support to help you meet SORP 2026 impact reporting confidently.
What we offer:
- Logic models to clarify your aims and how change happens
- 1:1 support to define outcomes and collect relevant data
- Proxy indicators to demonstrate broader impact
- Alignment with the UN Sustainable Development Goals
- Social Value Reports using the Social Value Engine
- Templates and tools to make reporting simple
- Designed reports ready for your funders, website, and social media
Next steps for your charity
- Confirm your SORP Tier
- Review whether you need an audit or an independent examination
- Decide on the format of your Trustees’ Annual Report
- Start planning your impact reporting framework
- Review your reserves, risks, and future plans
Let’s talk
If you’d like to explore how SORP 2026 affects your charity or want support to build a simple, proportionate impact framework we’d be delighted to help.
Our Social Value Support Package is a cost-effective starting point for charities wanting to strengthen their impact reporting.
