Charities financial reporting update

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 Charity Commission’s guidance and the Fundraising Code to forthcoming changes in FRS 102, SORP and Scottish charity law, 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 review 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. From 1 November 2025, fundraising regulation in the UK is evolving to reflect modern fundraising practices.

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.

Charity Governance Code review

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. A consultation on the Code was carried out in 2024, with responses reported in Autumn 2024. An updated version of the Code will be available in Autumn 2025.

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. In the past six months, the Charity Commission has released both Charity Commission News: April 2025 and Charity Commission News: July 2025, which addressed changes to charity accounting rules, the new charity accounting framework and more.

Charity Commission Publications

The Charity Commission produces regular publications and guidance on topical matters and also guidance which have been recently published or updated:

In the last 6 months, the following Charity Commission ‘CC’ guidance publications have been updated:

A full collection of the Charity Commission news and communications obtained from the governement website.

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

‘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.

Charity Commission Annual Returns Regulations 2024

The Charities (Annual Return) Regulations 2024 were made on 20 December 2024 and apply to all registered charities required to file with the Charity Commission with an accounting year ending on 1 January 2025 or after.

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 final changes to FRS 102, has been developed. Alongside changes to reflect how charities will need to recognise certain types of income and certain types of leases in their accounts, the proposed changes also include:

• Introduction of 3 tiers based on income levels to ensure proportionate reporting, whilst also meeting the information needs of users.
• Advancing reporting in important areas such as impact reporting, reserves, going concern and use of volunteers.
• Introduction of proportionate reporting for environmental, social and governance issues.

A consultation on the draft ran for 12 weeks in early 2025. Consultation responses are being reviewed and the SORP will be updated as necessary. It is likely that the new SORP will be approved in August to September 2025 by the FRC and published in Autumn 2025 with an effective date of 1 January 2026.

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 Guidance (“INPAG”)

IFR4NPO is a 5-year project to develop an internationally applicable financial reporting guidance for non-profit organisations, to be known as INPAG. 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. More information can be found here.

Exposure drafts have been issued in 2022 to 2024 and the final standard is due to be published in the second half of 2025.

The new accounting standards are being developed based on the IFRS for SMEs, with specific guidance being incorporated to reflect NPO specific issues and stakeholder needs. There is currently no intention for the Charity Commission to mandate the adoption of INPAG in the UK.

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 can now 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.

Updates to automatic disqualification guidance

OSCR published updated guidance on 8 May on the automatic disqualification of individuals in preparation for legal changes under the Charities (Regulation and Administration) (Scotland) Act 2023. These changes will come into effect in summer 2025.

The revised guidance reflects two significant updates:

• Automatic disqualification will also apply to individuals undertaking a senior management function.
• Extended disqualification criteria.

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.

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 (Regulation and Administration) (Scotland) Act 2023 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 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

The Scottish Governance Code for the Third Sector and the SCVO’s Good Governance Check-up document which can be used in conjunction with the Code.

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 Nick Sladden.