Accounts filling changes from April 2028
The Government has confirmed how it will implement accounts reforms under the Economic Crime and Corporate Transparency Act 2023, with changes taking effect from April 2028.
Key changes
- Small companies and micro-entities must file profit and loss (P&L) accounts with Companies House, although these can remain non-public.
- Accounts must be filed using commercial software.
- Removal of the option to file abridged accounts.
- Stronger eligibility statements for companies claiming audit exemption.
- All account components must be submitted together.
- Restrictions on shortening accounting reference periods.
The reforms aim to improve transparency, data quality and digital reporting, while helping tackle economic crime. HMRC and law enforcement will continue to have access to filed data. Businesses now have around 21 months to prepare, with Companies House guidance to follow.
Guidance on raising money for a charity
New guidance from the Charity Commission highlights important considerations for anyone raising funds for charity, reinforcing the need to act legally, ethically and transparently.
While public fundraising plays a vital role in supporting charitable causes, individuals and not the charity itself are responsible for ensuring their fundraising activities comply with legal requirements and best practice. Fundraisers are encouraged to clearly identify the charity they are supporting from the outset, as failing to do so may lead to complications if the chosen charity cannot accept the funds raised.
The guidance emphasises the importance of honesty and clarity in communications with donors, alongside complying with relevant regulations, including the Code of Fundraising Practice overseen by the Fundraising Regulator. Fundraisers should also take care when raising money for emergency appeals or personal causes, ensuring transparency about how donations will be used.
Ultimately, adhering to these principles helps protect public trust, ensures funds are used appropriately, and maximises the impact of fundraising activities. For charities and advisers alike, the message is clear: good governance and clear communication remain central to successful and responsible fundraising.
Public Trust in Charities 2026 – key findings
The Charity Commission’s Public Trust in Charities 2026 report shows that trust in charities remains strong, with 57% of people expressing high levels of confidence, making charities one of the UK’s most trusted institutions. However, the public increasingly expects charities to demonstrate transparency, deliver clear impact and provide value for money, with concerns about executive pay and administration costs continuing to affect perceptions. Trust is highest among those who donate, volunteer or engage directly with charities. Donors are also becoming more selective, favouring organisations where they can clearly see the difference their support makes. The findings underline the importance of strong governance, transparent reporting and effective communication of charitable impact.
Charity Commission Annual Report and Accounts 2025/26
The Charity Commission’s Annual Report for 2025/26 highlights a sector that remains resilient despite ongoing financial pressures, rising demand for services and increasing regulatory complexity. During the year, the Commission regulated more than 171,000 charities with combined income and expenditure exceeding £106 billion, while also handling a record 11,759 applications to register new charities. Public trust in charities remained stable, with 57% of people reporting high levels of trust, and charities continuing to rank among the UK’s most trusted institutions.
The report notes a significant increase in regulatory activity, including a 23% rise in compliance cases and the opening of 69 statutory inquiries. Key areas of focus included governance, safeguarding, trustee responsibilities and tackling the abuse of charities for extremist or unlawful purposes. The Commission also introduced the new Charities Statement of Recommended Practice (SORP), effective from January 2026, featuring a more proportionate three-tier reporting framework for charity accounts.
Charities urged to prepare for EHRC Code compliance
The Charity Commission has issued a reminder to charities to prepare for the upcoming implementation of the Equality and Human Rights Commission’s (EHRC) Code of Practice for services, public functions and associations. Once in force, the Code will carry legal status and will clarify how the Equality Act 2010 should be applied, including the position established by the Supreme Court’s 2025 judgment that, for the purposes of the Act, “sex” refers to biological sex.
Trustees are encouraged to review their organisation’s policies, procedures and service delivery arrangements to ensure compliance. Depending on the charity’s activities, obtaining legal advice may be appropriate. The Charity Commission is currently updating its Equality Act guidance for charities and expects to publish revised guidance in autumn 2026. However, charities should not wait for this guidance before taking action, as trustees remain responsible for ensuring legal compliance and avoiding unreasonable delays in preparing for the changes.
Reminder: Charity audit thresholds are increasing
As we approach the upcoming regulatory changes, this is a timely reminder that the charity audit thresholds in England and Wales will increase for financial years ending on or after 30 September 2026.
The audit income threshold will rise from £1 million to £1.5 million, meaning many charities currently subject to statutory audit may transition to an independent examination instead. In addition, the asset threshold will increase from £3.26 million to £5 million, alongside a higher income trigger of £500,000 for asset‑based audits.
Independent examination thresholds are also changing, with the lower limit increasing to £40,000 and the requirement for a qualified examiner rising to £500,000. Non‑company charities will benefit from a higher receipts‑and‑payments threshold, now set at £500,000.
These changes present an opportunity for trustees to review their governing documents, financial reporting processes, and assurance needs ahead of the 2026/27 year‑end cycle.
Guidance on general and emergency appeal
The Fundraising Regulator and Charity Commission have issued guidance for individuals running fundraising appeals, emphasising the need for activities to be legal, transparent and accountable. Fundraisers should clearly state which charity they are supporting, how donations will be used, and what will happen if fundraising goals or plans change. Using reputable online fundraising platforms is encouraged to ensure donations are handled securely, while personal bank accounts should be avoided where possible. Funds should be transferred promptly and accurate records maintained. Any expenses must be disclosed in advance. For emergency appeals, donating through established charities is often the most effective way to ensure aid reaches those in need quickly.
Guidance on provision of solicitation statements in fundraising
The Fundraising Regulator has launched new interactive resources to help charities and fundraisers understand when solicitation statements are legally required. These statements explain the relationship between a fundraiser and a charity, including how the charity benefits from the fundraising activity. To simplify what can be a complex legal requirement, the regulator has introduced a flowchart and interactive quiz that help users assess their obligations in different circumstances. The tools aim to improve accessibility, support staff training and strengthen compliance. Additional resources, including guidance on fundraising volunteers, are planned to further promote transparency and good fundraising practice across the sector.
ICAEW issues guidance over misconception over charity size and compliance
Many small charities assume their size means lighter regulatory expectations, but trustees have the same legal responsibilities regardless of the charity’s income. Limited resources are not a valid excuse for weak governance or poor record-keeping, and failing to meet regulatory standards can expose charities to risk. While recent increases to financial thresholds from 30 September 2026 will provide some flexibility, good governance remains essential.
To help trustees, ICAEW offers a range of free resources, including trustee CPD training, guidance on the new thresholds, SORP 2026 materials, webinars on receipts and payments accounts, and financial reporting help sheets. Its Volunteers portal and Trustee Training Modules also help charities access expertise and strengthen financial oversight.
For the full article, please see the following link.
Enhanced DBS check for supervised volunteers working with children
From 1 September 2026, some volunteers (including supervised volunteers) working with children may require an Enhanced DBS check, including a Children’s Barred List check. The change will primarily affect volunteers who regularly teach, train, coach, care for or supervise children in roles that meet the regulated activity criteria, such as those in youth groups, sports clubs, playgroups and other children’s activities. Charities should review relevant volunteer roles, assess whether additional DBS checks will be required, and update their safeguarding, recruitment and onboarding procedures ahead of the implementation date.
Cyber security: Beacon CRM cyber breach
The recent Beacon CRM cyber breach is a stark reminder of the growing cyber risks facing the charity sector. Used by more than 1,000 UK charities, Beacon confirmed that a threat actor gained access to an Amazon Web Services (AWS) credential and was able to copy its entire customer database, including attachments. The incident highlights the importance of strong access controls, third-party risk management, and continuous monitoring, as encryption alone cannot protect data when legitimate credentials are compromised. With regulatory scrutiny from the Information Commissioner’s Office (ICO) and Charity Commission, charities should review their cyber resilience, supplier oversight, incident response plans, and governance arrangements to protect supporter trust and sensitive data.
Charity sector risk assessment 2026
The Charity Commission’s Charity Sector Risk Assessment 2026highlights the growing challenges facing charities in England and Wales. Financial resilience remains a key concern, with many organisations operating on tight margins despite rising sector income and expenditure. The report identifies increased risks from fraud, cyber crime, governance failures, safeguarding issues, social tensions, and misuse of charities for private benefit. It also warns of vulnerabilities linked to emerging technologies, AI, and third-party relationships, noting that 30% of charities reported a cyber attack in the past year. Trustees are encouraged to strengthen risk management, financial oversight, cyber resilience, and governance to protect beneficiaries, assets, and public trust.
Hospice UK financial turnaround toolkit
Hospice UK’s Financial Turnaround Toolkit provides practical guidance for hospice leaders and trustees facing significant financial pressures. With around 75% of hospices expected to report a deficit and many considering service reductions, the toolkit offers a structured approach to stabilising finances while protecting end-of-life care. It covers preventing and preparing for turnaround, implementing recovery plans, governance, and people management.
The guidance emphasises that successful turnarounds require honest leadership, strong governance, timely decision-making, and a holistic approach to achieving long-term financial sustainability without losing focus on patient care.
Whilst the focus is on hospices, this is a useful tool for any charity facing financial pressures.
VAT treatment of locum doctors – important update for healthcare charities
HMRC has confirmed that supplies of General Medical Counsel (GMC) registered locum doctors providing medical services are exempt from VAT, following the Isle of Wight Foundation Trust Tribunal decision. This marks a change from the previous treatment, where locum doctor services supplied through agencies were generally subject to VAT. The revised approach will be particularly relevant to charities and not-for-profit healthcare organisations that use locum doctors to meet staffing needs. The exemption applies only to GMC-registered doctors acting in a medical capacity and does not extend to other healthcare professionals or staffing services. Organisations may wish to review past arrangements, as suppliers may be able to reclaim VAT for up to four previous years.
VAT on social media advertising – have your say
Charities are increasingly using digital and social media advertising to reach supporters and deliver services, but social media advertising remains ineligible for VAT relief, increasing costs for the sector. The Charity Tax Group (CTG) is continuing to press HMRC, HM Treasury and Parliament for change. To support its campaign, CTG is collecting evidence on advertising spending and the impact of VAT costs. This data will help demonstrate how current rules reduce funds available for charitable activities and strengthen the case for a VAT regime that better reflects modern advertising practices.
HMRC AML guidance – implications for Charities and Not-for-Profit organisations
Although most charities and not-for-profit organisations are not directly supervised by HMRC under the Money Laundering Regulations, HMRC’s updated anti-money laundering guidance provides important good practice. It highlights the need for a risk-based approach to managing money laundering, terrorist financing and fraud risks, particularly for organisations receiving donations, operating internationally or handling cash. Trustees should ensure appropriate due diligence is carried out on donors, partners, beneficiaries and overseas projects, supported by strong financial controls, governance and record-keeping. The guidance also emphasises the importance of monitoring transactions and understanding who organisations work with to help safeguard charitable funds and ensure resources are used for their intended charitable purposes.
We are here to help
If you need any support or advice in relation to the latest sector guidance or have any general questions, please get in touch with our charity accounting team.
