Keeping up with evolving charity regulation and reporting standards is essential for trustees and finance professionals navigating today’s complex landscape. Here, we’ll digest the latest developments in financial reporting, regulatory updates and governance guidance for UK charities, helping you stay informed, compliant and prepared for change.

From updates to the Fundraising Code and Governance Code, the Charity Sector Risk Assessment and changes in FRS 102 and the Charity SORP, we highlight what matters most and what actions trustees should consider now.

For broader insights on the sector and ongoing regulatory priorities, visit our charities sector page.

New fundraising regulator code 2025

The Code of Fundraising Practice applies to all fundraising carried out by charitable, philanthropic and benevolent organisations and third-party fundraisers, extending to organisations employed by charities to raise funds for them, and online fundraising platforms, across England, Wales and Northern Ireland. A new Code of Fundraising Practice (effective 1 November 2025) has been published, alongside accompanying support guides, offering a clearer, more adaptable approach to fundraising regulation. Fundraising organisations should review the new code and support guides and begin preparing to ensure compliance.

Guidance for use of artificial intelligence in fundraising

The fundraising regulator has issued guidance to help charitable fundraising institutions comply with the Code of Fundraising Practice when using artificial intelligence (AI) for fundraising purposes. The guidance is designed to help charitable fundraising institutions in exploring, preparing for and using AI to carry out charitable fundraising.

Charity Governance Code

The aim of the Charity Governance Code is to help charities and their trustees develop high standards of governance and to demonstrate exemplary leadership and governance. The Code is a practical tool to help trustees achieve this. In November 2025 a refreshed Charity Governance Code was released which builds on previous versions as a benchmark for good governance and is designed to be easier to navigate and more practical for charities of all sizes.

Overview of the Charity Commission’s communications

Charity Commission News (CC News) is the Commission’s newsletter, which provides essential information for charity trustees and their advisers. Recently, the Charity Commission has released both Charity Commission News: July 2025 and Charity Commission News: October 2025, which addressed changes to charity fundraising rules, the new charity accounting framework, the charity sector risk assessment and more.

Charity Commission Publications

The Charity Commission produces regular publications and guidance on topical matters and also guidance, a summary of those recently published or updated is below:

A full collection of the Charity Commission news and communications can be obtained from the government website.

Among a range of outreach materials provided by the Charity Commission, some notable updates include:

Guidance on serious incident reporting

The Charity Commission updated its guidance on serious incident reporting to reflect legislative changes brought in by the Charities Act 2022. The underlying requirement on trustees to report serious incidents, and the guidance on what constitutes a serious incident, remain the same. However the updated guidance ensures that the reporting guidance remains consistent with the current legislative framework.

Charity Sector Risk Assessment 2025

In September 2025, the Charity Commission released its first annual Charity Sector Risk Assessment to help trustees and charity leaders understand risks and make informed decisions. The assessment uses data from annual returns and Charity Commission activities to highlight systemic risks like financial resilience and public benefit and provides links to relevant guidance.

‘Failure to prevent fraud’ offence regulatory alert

On 1 September 2025 a new ‘Failure to prevent fraud’ offence comes into force. This offence will affect large, incorporated charities that meet at least two of the following criteria: more than 250 employees, £36m of income or £18m in total assets.  Under the offence, an organisation may be criminally liable where an employee, agent, subsidiary, or other “associated person”, commits a fraud intending to benefit the organisation (or its clients) and the organisation did not have reasonable fraud prevention procedures in place. The Charity Commission has alerted relevant charities to read the Home Office guidance, and where necessary to enhance their approach to fraud prevention and seek professional legal advice.

Updates to FRS 102 and the Charities SORP

In March 2024, the FRC issued the FRS 102 periodic review including finalised amendments. The changes will affect all entities applying FRS 102 and not solely charities. Highlights include:

- Changes to the requirements around revenue arising from exchange transactions which are akin to those included in IFRS 15.

- Adopting a version of IFRS 16 which will bring all leases except those of low value/short life onto the balance sheet.

The effective date for the amendments is accounting periods beginning on or after 1 January 2026.

As a consequence of this, the next edition of the Charities Statement of Recommended Practice (SORP), taking account of the changes to FRS 102, has been released. The key changes in the Charities SORP are:

- Lease Accounting: Most operating leases must now be reported on balance sheets, increasing reported assets and liabilities. Lease expenses will also be presented differently in financial statements.

- Revenue Recognition: A five-step model is introduced for recognising income from exchange contracts, changing how such income is reported.

- Cash Flow Statement Relief: Charities with income under £15m are exempt from preparing a cash flow statement unless required to do so, in accordance with FRS 102 where they do not meet the definition of a small entity.

- Tiered Reporting: Three reporting tiers based on income ensure proportionate disclosures.

- Trustees’ Annual Report: Enhanced requirements for reporting financial reserves, future plans, and public interest topics such as impact and ESG issues.

- Social Investments: Simpler reporting and alignment with the Charities Act 2011.

- Provisions & Contingencies: Clearer and simpler reporting requirements.

For further insights and consideration of what does the new SORP mean for charities’ financial reporting, visit our charities sector page for considerations around the impact of FRS 102.

International Non-Profit Accounting Standard (INPAS)

The International Non-Profit Reporting Foundation (INPRF) has issued the world’s first International Non-Profit Accounting Standard (INPAS), designed to unlock transparency, trust and comparability in non-profit financial reports. Whilst it will be the decision of the regulatory bodies in each jurisdiction whether to mandate adoption of the standards, their adoption across the world aims to improve the clarity and consistency of financial reports, resulting in greater credibility and trust in the not-for-profit sector globally. There is currently no intention for the Charity Commission to mandate the adoption of INPAS in the UK.

Financial Reporting Thresholds

In October 2025, the Department for Culture, Media and Sport, announced changes to the Charity reporting thresholds for England and Wales, these changes are closely linked to the tiered SORP model and are intended to simplify compliance.

Audit requirements

- Mandatory audit income threshold increases from £1m to £1.5m.

- Asset threshold (for charities with income over £500,000) increases from £3.26m to £5m.

Independent examinations

- Mandatory threshold increases from £25,000 to £40,000 reducing administrative burdens for smaller charities.

- For more detailed examinations by a professionally qualified examiner, the threshold will double: from £250,000 to £500,000 income.

Accounts preparation

- Non-company charities may now prepare receipts and payments accounts if income is below £500,000 (previously £250,000). Those above this threshold must prepare accrual accounts under SORP.

Group accounts

- The threshold for consolidated group accounts also rises from £1m to £1.5m in aggregate income.

These changes are expected to come into effect on 30 September 2026, applying to accounting years ending on or after that date. However, the Department for Culture, Media and Sport will need to take legislation through Parliament to formally introduce these changes, which is expected during 2026.

This section details changes and current developments specifically impacting charities (including cross border charities) in Scotland.

Regulation – OSCR

OSCR has been working on achieving its mission to regulate in a way which builds trust and confidence in Scottish charities, holds charities to account and strengthens their ability to positively contribute to society.

Their recent work includes:

Charity Trustee information requirements

From 30 June 2025 charities have been able to submit their charity trustee information through OSCR Online. This is in preparation for the publication of the names of charity trustees from early 2026 under the new Charities (Regulation and Administration) (Scotland) Act 2023. Any charity completing a new online annual return created on or after 30 June 2025, will be required to include charity trustee information as part of the submission. While this requirement does not apply to online annual returns created before 30 June 2025, OSCR are strongly encouraging all Scottish charities to provide charity trustee details as soon as possible to ensure their compliance with the new legislation.

At the same time in early 2026, OSCR will begin publishing annual reports and accounts in full on the Scottish Charity Register as they are received.

New automatic disqualification rules now in place

From 31 August 2025, new rules on the automatic disqualification of individuals from acting in Scottish charities came into force under the Charities (Regulation and Administration) (Scotland) Act 2023.

OSCR published updated guidance on 8 May on these rules in preparation for the changes.

The guidance reflects two significant updates:

- Automatic disqualification will also apply to individuals undertaking a senior management function.

- Extended disqualification criteria.

These changes are in addition to the previous restrictions which prevent individuals, including those who are an undischarged bankrupt, who have an undischarged Protected Trust Deed (PTD) or someone who is disqualified from being a company director from being a charity trustee in Scotland.

Disqualified individuals may apply to OSCR for a waiver. Waivers can apply to a specific charity, a type of charity, or charities in general.

All Scottish charities should take the time to familiarise themselves with the new guidance, assess what it means for their organisation and take any necessary actions.

To support charities in undertaking appropriate checks and due diligence when appointing new trustees, OSCR has published an updated Trustee Declaration Form which is used as part of the application for charitable status process. OSCR encourages all charities to use sections 2 and 3 of the revised form as a template for use as part of their recruitment and onboarding processes, making amendments where necessary for senior management functions.

Sector overview

OSCR’s sector overview report provides an understanding of what the Scottish charity sector is made up of, what it looks like and what issues are influencing and challenging charities. The new report is now a quarterly interactive report that allows you to filter some of the data to get to the information you would like to see.

Finally, OSCR retains a plethora of useful guidance and publications on their website as well as useful videos, presentations and webinars on their YouTube channel. OSCR has also recently set up a WhatsApp Channel where you can get the latest news, updates and information for charities in Scotland sent straight to your phone.

Legislation updates

Changes to Scottish Charity Law

The Charities Accounts (Scotland) Amendment Regulations 2025

These regulations were published in November 2025 and came into force for accounting periods commencing on or after 1 January 2026.

The key changes are:

- The audit exemption gross income threshold has been increased from £500,000 to £1,000,000.

- The threshold for exemption from the requirement to prepare consolidated accounts has also been increased from £500,000 to £1,000,000.

It is worth noting that there has been no change to the asset threshold, which remains at £3.26m. Charities with total gross assets in excess of this amount will not qualify for exemption from audit, irrespective of their income.

And as is the case at present, charities will still be required to prepare audited financial statements if it is required by the charity’s governing document, by funding agreements or by some other specific requirement.

The Charities (Regulation and Administration) (Scotland) Act 2023

These regulations came into effect on 1 April 2024 and enhances OSCR’s regulatory powers and helps to increase accountability and transparency in Scotland’s 25,000 charities.

Some recent and imminent changes are referred to above. Changes already in effect relate to removing charities, increasing OSCR’s inquiry powers and connection to Scotland.

Other useful guidance

Other useful guidance includes both the Scottish Governance Code for the Third Sector and the SCVO’s Good Governance Check-up which in conjunction with the Code can be used to help you assess where you’re doing well, and give you a bespoke action plan for areas where you need to improve.

Stay updated with charity sector events and guidance

From regular charity seminars to training sessions and events across the UK, we’re helping trustees and charity professionals stay ahead of fast-moving regulatory and financial reporting developments.

For ongoing updates, insights and expert commentary, visit our Charity Trustees Insights Hub to find overviews and breakdowns of the latest changes.

To discuss any of the updates mentioned above and get tailored advice for your charity, please contact Hannah Catchpool.