Charities & Not-for-Profit Update: June 2026
Making grants to charities and other organisations
The Charity Commission has published updated guidance on making grants to charities and other organisations, helping trustees ensure funds are used effectively and in line with their charity’s purposes. The guidance covers the full grant-making process, including setting priorities, carrying out due diligence, managing risks, and monitoring outcomes. Trustees are reminded to only award grants that further their charitable objectives and to undertake appropriate checks on recipients.
Charities may award grants to non-charities where this supports their aims, but additional safeguards are required due to increased risk.
Clear written agreements, ongoing monitoring, and robust record-keeping are essential to ensure accountability and demonstrate that funds are properly applied. Overall, the guidance reinforces the importance of good governance and proportionate oversight in grant-making.
More detailed guidance can be found here.
What is a trustee and how do you become one?
To mark Volunteers’ Week running from 1 June 2026, the Charity Commission is highlighting the vital role of charity trustees – a unique and impactful form of volunteering. Trustees are volunteers who lead charities, shaping their direction, overseeing finances and ensuring they deliver on their purpose and legal duties.
Trusteeship offers a valuable opportunity to support a cause while developing skills in leadership, decision-making and governance. Importantly, people from all backgrounds and stages of life are encouraged to get involved, with diverse perspectives strengthening boards and decision-making.
With many charities seeking new trustees, Volunteers’ Week is a timely reminder of the important contribution individuals can make by stepping into these roles and helping charities create lasting impact in their communities. You can read the blog here.
Guidance on charity trustees on conflicts of interest
The Charity Commission has issued redesigned guidance to help trustees better identify and manage conflicts of interest, including financial conflicts and conflicts of loyalty. The update follows a sharp rise in cases involving alleged private benefit abuse, many linked to unmanaged conflicts. The Commission’s first Charity Sector Risk Assessment reported a 23% increase in such cases in a single year, with early indications suggesting the trend is continuing. Although these cases represent a small proportion of the sector, conflicts involving trustees’ personal interests remain a recurring risk to public trust.
Research shows many trustees struggle to recognise conflicts, often due to lack of awareness rather than intentional wrongdoing. The refreshed CC29 guidance is shorter, clearer and includes practical examples to support trustees in protecting their charity’s assets and reputation. The Commission warns that decisions made without properly managing conflicts may be legally invalid and could result in financial loss or findings of mismanagement.
More information can be found here.
Government unveils plan to boost philanthropic investment in disadvantaged communities
The UK government has introduced Our Place to Give, a roadmap aimed at directing more philanthropic funding into England’s most disadvantaged communities. Although £14 billion was donated to charity in 2025, funding distribution remains uneven, with London receiving a disproportionate share of major donations and Gift Aid. Supported by £1 million of government funding, the initiative seeks to connect high-net-worth donors with local organisations beyond the capital. It proposes measures such as match‑funding schemes, stronger partnerships between communities and donors, and greater philanthropist involvement in shaping funding programmes.
Minister Stephanie Peacock said the approach could “unlock a new wave of giving”, helping reduce regional inequalities and support sustainable, long-term social impact. More information can be found here.
Renters Rights Act and Charity Commission guidance update
The Renters’ Rights Act, effective from May 2026, introduced significant changes for charities letting residential property. Assured shorthold tenancies have been replaced by rolling periodic tenancies, giving tenants greater security and limiting landlords’ ability to regain possession without clear grounds. Rent increases are now restricted to once a year, must reflect market levels, and require two months’ notice.
Alongside this, proposed reforms to commercial leases – including a potential ban on upward-only rent reviews – could further impact charities entering new agreements.
Charity landlords should review their property arrangements to ensure compliance and manage financial and operational implications. A guide to the Act can be found here.
Updates to CC28 Guidance Notes relating to land
As a result of the changes to the Renters’ Rights Act, the Charity Commission guidance: Sales, leases, transfers or mortgages: what trustees need to know about disposing of charity land (CC28) has been updated.
The Charity Commission has refreshed its CC28 guidance on selling, leasing or otherwise disposing of charity land in England and Wales. Trustees must be able to demonstrate that any disposal is in the charity’s best interests, that they have the legal power to proceed, and that they have obtained the correct level of professional advice. The update clarifies when a formal adviser’s report is required, when simplified advice is acceptable, and the additional steps needed for designated land or disposals involving connected persons.
A companion update covers mortgaging charity land, emphasising that trustees must understand the risks and ensure any borrowing supports the charity’s purposes and financial sustainability. Before granting a mortgage, trustees should assess affordability, consider alternative funding options, and obtain appropriate professional advice on valuation and terms. Where the mortgage is granted to a connected person, Charity Commission consent is required.
Across both guidance notes, the Commission reinforces the importance of robust decision‑making, clear records and proper oversight. Trustees are expected to show that they have followed the statutory process, managed conflicts of interest, and secured the best terms reasonably obtainable. These updates provide clearer expectations for advisers and trustees, helping charities protect their assets and demonstrate good governance.
Child sponsorship: improving transparency across the sector
The Fundraising Regulator has completed its review of child sponsorship marketing, led by its proactive regulation team, resulting in stronger alignment with the Code of Fundraising Practice. Launched in early 2024, the review addressed concerns that some campaigns could mislead donors by implying one‑to‑one sponsorship when funds were used more broadly.
Working with 53 charities and holding workshops with 18 organisations, the regulator identified good and poor practice, informing guidance published in April 2025. A follow‑up review shows progress, with charities improving transparency, clarifying how donations are used, and adopting more accurate, community‑focused messaging to strengthen donor trust and support informed giving decisions.
More information can be found here.
Fundraising guidance for transport network operators
The Fundraising Regulator has issued guidance for transport network operators hosting charitable cash collections on their premises. The advice aims to ensure collections are carried out safely, securely and in line with good fundraising practice, helping to protect donors, fundraisers and staff.
Operators are encouraged to implement clear booking processes, carry out basic checks on charities, and monitor collections to ensure transparency and appropriate behaviour. Donations should be handled securely, with clear information provided to donors so they can make informed decisions.
Overall, the guidance reinforces the importance of legal, open, honest and respectful fundraising to maintain public trust.
The guidance can be found here.
ICO “soft opt-in”
The ICO has issued guidance on a new “charitable purposes soft opt‑in” allowing charities to contact supporters by email, text or social media without prior consent, provided strict conditions are met. Introduced under the Data (Use and Access) Act 2025 and effective from 5 February 2026, the change applies where individuals have shown genuine interest in or support for a charity. Charities must still provide clear opt‑out options and ensure safeguards are in place. The reform aims to boost fundraising and engagement, supported by updated ICO guidance developed following sector consultation and collaboration with the Fundraising Regulator.
More details can be found here.
ICO guidance on direct marketing using electronic mail
The ICO updated guidance explains how organisations must comply with rules on direct marketing by electronic mail under the Privacy and Electronic Communications Regulations (PECR).
It defines direct marketing broadly as any promotional communication, including fundraising and campaigning, and electronic mail as messages such as emails, texts, voicemail and social media direct messages. Organisations sending unsolicited marketing to individuals must either obtain valid GDPR‑standard consent or meet the requirements of a “soft opt‑in” exemption.
The guidance clarifies responsibilities for senders and instigators, rules on subscriber types, and when marketing is solicited or unsolicited. It also covers use of contact lists, opt‑out rights, and the interaction between PECR and data protection law, helping organisations apply the rules in practice.
The full guidance can be found here.
Cyber Security Breaches Survey 2025/2026 – key findings
The latest UK Cyber Security Breaches Survey shows that cyber risk remains widespread but relatively stable. Around 43% of businesses and 28% of charities reported experiencing a cyber breach or attack in the past year, highlighting the ongoing scale of the challenge. Phishing continues to be the most common and disruptive threat, with increasing sophistication driven in part by emerging technologies such as AI.
While awareness of cyber risk is improving at board level, this is not yet translating into stronger action, with gaps in areas such as staff training, incident response planning and supply chain risk management. Overall, the survey highlights a persistent gap between awareness and preparedness, reinforcing the need for stronger governance, controls and cyber resilience across organisations.
AI-powered cyber threats
The ICO has published guidance highlighting how organisations can protect themselves against increasingly sophisticated AI-powered cyber threats. These include AI-generated phishing, deepfake social engineering, automated attacks and adaptive malware, all of which are faster and harder to detect.
The ICO recommends five key steps: understanding emerging threats, getting basic cyber controls right and layering defences, restricting access, improving monitoring and incident response, and ensuring strong protection of personal data.
While many of these controls are not new, the rise of AI increases both the speed and scale of attacks—making effective governance, robust controls and ongoing vigilance more important than ever. The blog can be read here.
Temporary VAT reduction on children’s and family attractions
The Government has announced a temporary reduced VAT rate of 5% from 25 June to 1 September 2026 on children’s meals, tickets and family‑focused attractions to make summer activities more affordable. The reduction applies to children’s meals from dedicated menus, children’s and family tickets for cinemas, theatres and exhibitions, and admission to qualifying attractions such as theme parks, zoos, museums and soft play centres. For attractions, the 5% rate can apply to all admissions, not just children’s tickets.
For charities and not‑for‑profits running visitor attractions, cultural venues or catering services, this may reduce VAT on standard‑rated admissions from 20% to 5% during the period. However, admissions already exempt under cultural VAT rules remain unaffected. Specific conditions apply to pricing, marketing and eligibility, and most season tickets extending beyond 1 September will not qualify.
The Government expects organisations to pass on savings to families, potentially reducing costs by up to £20 per visit. Free bus travel for children aged 5–15 in England will also apply throughout August. Organisations should review pricing, ticketing and VAT processes to ensure compliance, noting that normal VAT time‑of‑supply rules continue to apply.
For further guidance, you can follow the latest HMRC guidance here and here.
Mileage rate changes
The government has increased mileage rates from 45p to 55p per mile for the first 10,000 miles where employees use their own car for business trips. The rate increase is backdated to 6 April 2026. Charities can choose whether to adopt the new rate but should consider cost implications, especially for travel-heavy roles. Backdating may require payroll adjustments. Policies and systems should be updated accordingly. Employees may claim tax relief if paid less, but volunteers cannot, so clear communication is essential to manage expectations and financial impact. More details can be found here.
Major charity tax compliance reforms (from April 2026)
The Finance Bill 2025/26 introduced a number of targeted reforms aimed at protecting charitable tax reliefs and strengthening compliance. Key changes include:
- Updates to the tainted donations rules, with HMRC focusing more on outcomes than intent and widening the concept of “financial advantage” to “financial assistance”.
- The rules on approved charitable investments are also tightening, requiring clearer evidence that investments directly support charitable purposes.
- Legacies will be explicitly brought within the tax regime, meaning funds must be applied for charitable purposes or risk a tax charge.
HMRC also now have enhanced compliance and enforcement powers, increasing scrutiny on trustees and documentation.
Overall, the impact is primarily on governance and compliance. While most well-run charities should not see significant operational change, stronger record-keeping and clearer decision-making evidence is essential. Read more details here.
Independent School Standards (ISS) changes
Significant updates to the Independent School Standards (ISS) have now been published, marking an important shift in expectations for all independent schools.
The revised guidance, issued by the Department for Education, aims to strengthen safeguarding, improve educational quality, and ensure consistent compliance across the sector.
Schools are encouraged to familiarise themselves with the changes, which include clearer requirements around leadership, welfare, premises, staffing suitability, and the handling of complaints. These updates form part of the government’s wider mission to ensure every child receives a high-quality education in a safe environment.
Proprietors, governors and school leaders should review the new standards and assess what adjustments may be needed ahead of upcoming inspections. The full guidance, effective since April 2026, is available here.
The Children’s Wellbeing and Schools Act
The Children’s Wellbeing and Schools Act 2026 introduces wide-ranging reforms across education, safeguarding and children’s social care, with the aim of ensuring no child falls through gaps between services.
Key changes include strengthened multi-agency safeguarding, improved information sharing, and enhanced support for children in care and care leavers, including assistance up to age 25.
In education, the act promotes greater consistency across schools, including requirements around teacher qualifications, curriculum standards and oversight of academy trusts. Families will also benefit from cost-of-living measures such as expanded free school meals, free breakfast clubs and limits on uniform costs.
Implementation will be phased, with further detail to follow through guidance and secondary legislation.
Azets’ 2025 Sustainability Impact Report
Azets’ 2025 Sustainability Impact Report, Making an Impact in 2025, outlines progress across environmental, social and governance priorities. It shows sustainability embedded in decision making, support and responsible client service.
Achievements include launching the first groupwide Sustainability Strategy, advancing towards Net Zero through greater renewable energy use and improved emissions data, and strengthening governance via a Double Materiality Assessment and benchmarking, alongside investment in people, belonging and social impact initiatives.
Upcoming events
Webinar: Preparing for Change - The New Charity SORP and FRS 102 Explained – 11 June 2026
In this free session, we will walk through the key changes and what they mean for your organisation, including:
- The advantages of the new three‑tier structure for Trustees’ Annual Reports
- Updated audit threshold size limits and their implications for reporting
- The revised treatment of leases and its impact on financial statements
- Major considerations arising from the new five‑step revenue recognition model, with examples tailored for charities
- Practical steps NFPs should be taking now to support a smooth transition
Register your place here: Registration
Our Charity and NFP team
Azets has one of the UK’s largest dedicated charity and NFP teams, supporting over 2,500 clients with 26 specialist partners. Our professionals combine technical excellence with practical insight; many serve as trustees and contribute to sector-wide initiatives. This dual perspective ensures our work goes beyond compliance, delivering challenge, insight, and meaningful knowledge transfer.
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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.
