April 2026 Not-for-profit and charities update

Guidance for charities on the evolving situation in Iran

The Charity Commission has warned that instability in Iran and the wider region may affect UK charities, urging trustees to prioritise staff safety, follow Foreign, Commonwealth & Development Office (FCDO) travel advice, and apply existing guidance for protecting those working overseas. Charities commenting publicly on events must ensure any political activity directly supports their charitable purposes and complies with campaigning and social‑media rules. Trustees should also be mindful of risks arising from perceived links to sanctioned individuals or groups, with the Commission prepared to act on extremism‑ or terrorism‑related concerns.

In the UK, heightened tensions may create safety challenges, particularly for organisations with perceived regional or faith links. Trustees must safeguard staff, volunteers, and the public, follow sanctions and safeguarding guidance, and report serious incidents for regulatory support.

More detailed guidance can be found here.

Charity Commission update: Disaster and emergency appeal guidance (CC40)

The Charity Commission has updated its CC40 guidance to help charities run disaster and emergency appeals effectively and lawfully. The guidance sets out trustees’ key responsibilities when launching appeals, including defining clear purposes, planning how funds will be used, ensuring good financial stewardship, and communicating transparently with donors. It stresses the need to consider from the outset how to manage surplus or insufficient funds and how to respond if circumstances change.

The latest revision reflects Charities Act 2022 changes that simplify the rules on “failed appeals,” giving trustees greater clarity and confidence when reallocating or returning funds. The refreshed CC40 also aligns with wider updates to the Commission’s fundraising guidance, making both sets of materials shorter, clearer, and more accessible.

Decision making for Charity Trustees (CC27)

The Charity Commission’s updated guidance reinforces that effective, well‑reasoned decision‑making is central to good governance. Trustees must follow seven core principles when making decisions: act within their powers, act in good faith, be sufficiently informed, consider all relevant factors, disregard irrelevant ones, manage conflicts of interest, and ensure decisions fall within the range a reasonable trustee body could make.

Trustees should make decisions collectively, follow their governing document, and keep clear, proportionate records explaining how decisions were reached. The guidance stresses the importance of assessing risk, consulting stakeholders where appropriate, and seeking professional advice when needed. It also highlights the need to manage conflicts of interest robustly and to justify any departure from expert advice.

Delegation is permitted but ultimate responsibility remains with the board. The Commission will not judge decisions based on outcomes alone, but on whether trustees followed proper process. Applying these principles helps protect charities, supports transparency, and reduces the risk of challenge or regulatory intervention.

Charity Commission annual return analysis

The Charity Commission’s Annual Return 2024 analysis covers data from 106,973 charities in England and Wales. Filing compliance rose to 96.6%, and the charity register grew by 2,280 organisations. Most charities (89%) operate independently, while around 9% are part of federated structures. Sector income increased to £102bn, with expenditure close behind at £101bn, leaving a £1bn surplus, though smaller charities continued to run deficits. Grant‑making totalled £17.84bn, mostly awarded to other charities. Overseas income and expenditure were each around £10-11bn, primarily involving the US, Switzerland, and China. Charities reported 1.6 million employees and 6.28 million volunteers, averaging 3.8 volunteers per paid worker. Overall, the sector showed improved financial resilience but ongoing pressures, particularly for smaller organisations. More information can be found here.

Engaging donors in vulnerable circumstances

A clear understanding of your charity’s financial position is one of the strongest foundations for good governance, and the Charity Commission’s new Financial Health Check Toolkit makes that easier than ever. Many trustees feel less confident when it comes to finance, but this toolkit turns a complex area into something practical, accessible and genuinely empowering. It brings together essential guidance, simple checklists and hands‑on tools to help you assess your charity’s financial resilience, spot risks early and plan with confidence.

Whether you want to strengthen reserves, improve cashflow oversight or ensure your charity is meeting its legal duties, the toolkit offers a structured way to build clarity and control. It’s designed to support trustees at every level of experience, helping you ask the right questions and make informed decisions that protect your charity’s future. Exploring these resources is a valuable step toward stronger financial stewardship and more sustainable impact.

Getting charity governance right

A recent Charity Commission inquiry highlights essential governance standards that all charities must follow. Although focused on one organisation, the findings offer sector‑wide lessons:

1. Statutory reporting failures: The charity repeatedly missed deadlines for filing annual accounts, returns and trustees’ reports. These are legal requirements, not administrative formalities, and are vital for transparency and maintaining public trust.
2. Improper board structure: The organisation operated for long periods without a properly appointed, quorate board. Trustees must be formally appointed, engaged, and able to make valid decisions; without this, effective oversight is impossible.
3. Weak financial controls: Basic financial policies, covering expenses, cash handling and overseas spending were missing, resulting in unreliable accounts. Trustees should regularly review internal controls and use the Commission’s CC8 guidance as a benchmark.
4. Failure to comply with Commission directions: Ignoring orders or directions may constitute misconduct or even a criminal offence.

Overall, the inquiry reinforces the need for strong governance, timely compliance and active stewardship. More detail can be found here.

Strengthening of Charity Commission powers

The UK government has announced plans to expand the Charity Commission’s powers to improve regulatory oversight and address concerns around extremism in the sector. The proposals include faster action to close charities involved in extremist behaviour, with officials working to streamline investigations and enforcement.

The government also intends to introduce strengthened trustee screening, including automatic disqualification for individuals with hate‑crime convictions or evidence of promoting violence. Mandatory ID verification for trustees is being considered to enhance accountability.

Additional measures include the digitisation of charity accounts to improve transparency and efficiency, and potential new powers for local authorities to act against unlicensed street fundraising.

These proposals come amid rising concerns about extremist activity within charities, with more than 400 relevant cases opened since October 2023. Sector bodies such as NCVO have urged the government to ensure the measures remain proportionate and do not disproportionately impact smaller organisations.

Charity banking

The Charity Finance Group has launched its 2026 Banking Survey to gather updated insights on charities’ experiences with banking services. The survey builds on findings from 2024 to identify progress, persistent challenges and emerging issues. It also explores how ethical, environmental, sustainability and governance factors influence banking choices, as well as motivations and barriers to switching banks. Responses remain confidential and support sector‑wide advocacy. The survey is open until 20 April 2026.

OSCR to publish more charity information from March 2026

OSCR has implemented the final measures required by the Charities (Regulation and Administration) (Scotland) Act 2023, effective from 9 March 2026, to enhance transparency across the Scottish charity sector. The Scottish Charity Register will now display the first and last names of all charity trustees, with limited exemptions where appropriate. Trustee information can be updated directly through OSCR Online.

OSCR will also begin publishing every annual report and full set of accounts submitted via the online annual return. These will appear without redactions, replacing the previous system in which only some accounts were published and personal details were removed. Charities must therefore ensure all legally required information is included before submission. Additionally, the register will show extra data already collected in the annual return, such as a description of the charity’s activities and the number of staff, trustees, and volunteers. These changes are designed to strengthen regulatory oversight and further build public trust.

The Fundraising Regulator 2025 annual report

The Fundraising Regulator has published its Annual Report that shines a bright spotlight on how trust, transparency and high‑quality fundraising continue to shape the sector’s future.

This year’s publication highlights the growing commitment charities are making to responsible fundraising, with more organisations than ever aligning their practices to the code and demonstrating real accountability to the public. It also captures the regulator’s work behind the scenes on handling complaints, supporting charities through guidance, and strengthening standards to reflect how donors choose to give today.

For fundraisers, it’s a reminder that ethical practice isn’t just a requirement; it’s a powerful driver of confidence and long‑term support. The report offers practical insights, emerging trends and clear expectations for the year ahead.

Landmark Ruling: Volunteer or worker?

The Maritime and Coastguard Agency (MCA) v Groom (2026) ruling has major implications for charities: paying volunteers even modestly may create worker status, triggering employment rights, tax liabilities, and the need for careful legal review.

The Court of Appeal’s decision in Maritime and Coastguard Agency v Groom (2026) confirms that individuals described as volunteers can, in practice, be workers. The case concerned Martin Groom, a Coastguard Rescue Officer (CRO) who was labelled a volunteer and was not obliged to accept callouts. However, when he did attend, he had to follow the MCA’s instructions and was entitled to claim remuneration for his time. After his role was terminated, he argued he had worker status and therefore the right to be accompanied at an appeal hearing.

The Employment Tribunal initially found no worker relationship, relying on the voluntary label, optional remuneration, limited control, and an HMRC view. The Employment Appeal Tribunal overturned this, finding that each time Groom undertook an activity for which he could be paid, a contract arose. The Court of Appeal agreed, emphasising that a contract existed during each remunerated activity, even without an overarching obligation to work. Mutual obligations existed during those periods: the CRO had to follow instructions, and the MCA had to pay him. The Court highlighted that entitlement to hourly compensation was “the essence of remuneration”.

More detailed information can be found here.

HMRC’s structured risk reviews

HMRC has launched a new round of Structured Risk Reviews (SRRs) across the charity and not‑for‑profit sectors, signalling a more intensive and data‑driven approach to oversight. Using its enhanced Connect analytics system, now supported by AI, HMRC draws on information from tax filings, public records, social media, and more than 30 external databases. As a result, even minor discrepancies, inconsistencies, or unusual patterns can prompt a review.

Common SRR triggers include:

• Large or geographically dispersed employee populations
• Multiple or complex income streams
• Repayment claims
• Trading or commercial activities
• Overseas operations, projects or subsidiaries

Areas HMRC will be reviewing:

• Corporation Tax and charitable expenditure
• Gift Aid governance and processes
• VAT treatment, partial exemption, and income recognition
• Employment taxes, benefits, and payroll controls

VAT Changes on Donated Goods – Effective 1 April 2026

From 1 April 2026, new VAT rules allow businesses to donate goods to charities without needing to account for VAT, even when those goods are used by the charity or distributed to beneficiaries, rather than only sold. This marks a significant extension of the current reliefs and is designed to encourage greater levels of charitable giving. Key changes include:

• Extended scope: VAT relief will apply to goods donated for a charity’s own use in non‑business activities, or for onward donation to individuals in need—not just for resale.
• Value limits: A per‑item limit of £100 will apply, with a higher £200 threshold for essential electrical goods.
• No charges: Goods must be donated free of charge for the relief to apply.

This change is expected to reduce the VAT burden on businesses, making it easier and more attractive for them to donate usable goods directly to charities.

The Great Gift Aid Hunt

The Great Gift Aid Hunt is an annual campaign led by Swiftaid, supported by the Chartered Institute of Fundraising and JustGiving, helping UK charities identify unclaimed Gift Aid they are already entitled to. Each year, around £564 million in Gift Aid goes unclaimed due to incomplete donor declarations, data gaps, and mismatched supporter information. Charities upload their donation data to Swiftaid’s Gift Aid Finder tool, which matches donations to millions of UK taxpayers. When a match is found, donors are notified and a Gift Aid declaration is created unless they opt out, after which Swiftaid submits claims to HMRC, and any funds recovered are paid directly to the charity. Past campaigns have shown that 98% of participating charities uncover additional Gift Aid, with recent hunts unlocking more than £1.5 million in missed income for charities.

With the Great Gift Aid Hunt, you can check your existing donation data against millions of UK taxpayers to uncover unclaimed Gift Aid. The deadline is 24 April 2026. More details can be found here.

Charity Digital Skills Report

The Charity Digital Skills Report is the UK charity sector’s annual barometer of digital capability, tracking how charities use digital and AI, where they are progressing, and what support they need. Interim results highlight that charities’ AI adoption is rising rapidly, with 88% now using AI and nearly half using it strategically. Usage focuses on admin, content creation and monitoring. Barriers are growing around skills, accuracy, data privacy and ethics. Many charities want training and sector‑specific AI guidance to move forward.

The deadline to complete the survey is 20 April 2026. More information can be found here.

Consultation on Gambling Commission fee changes

The government has launched a public consultation, informed by data from the Gambling Commission, on proposed changes to operating licence fees across the gambling sector. The review aims to ensure the Commission can fully recover its regulatory costs and strengthen its ability to address emerging risks in the industry. Three options are under consideration:

• A 30% increase recommended by the Commission;
• A 20% increase proposed by government; and
• A preferred hybrid model of a 20% rise plus an additional 10% ringfenced to combat illegal gambling markets and protect licensed operators’ revenue.

The proposals also include a refined, risk‑based fee structure linked to market share, harmonised fee categories, and aligned casino fee frameworks. Application fees, first‑year fees, and personal licence fees would rise in line with the chosen option. If approved, changes will be implemented through secondary legislation and take effect from 1 October 2026, remaining in place until a future fee‑setting framework is introduced.

More details can be found here.

Charity Finance Group (CFG) introduces the Risk Leadership Programme

The Risk Leadership Programme is a five‑month online initiative from CFG and The Risk Collaborative designed to strengthen charities’ strategic approach to risk. Aimed at trustees and staff involved in governance, finance, operations, or risk, it runs from June to November 2026 with a follow‑up session in early 2027. The programme combines practical workshops, expert insights, and peer learning, using a dual‑group model where trustees and staff learn separately before coming together to build shared understanding. Led by Sabrina Segal and Nigel Kippax, it focuses on culture, decision‑making, and reframing risk as an opportunity, helping charities move beyond inconsistent or overly bureaucratic approaches.

If you would like to register your interest, please click here.

Introducing Azets Wealth Management

Azets Wealth Management provides holistic financial planning and wealth services for individuals and organisations, focusing on long‑term goals rather than one‑off products. Core services include investment strategy, retirement planning, tax and estate planning, protection and insurance, and employee benefits.

This type of service can be useful for charity trustees and finance teams managing reserves, endowments, or legacy funds. It may help with developing an investment policy, balancing risk and liquidity, and ensuring governance around restricted and unrestricted funds. Advice on trustee responsibilities, executive pensions, and tax‑efficient giving could also support organisational sustainability.

For more information, please review the website here, or reach out to your local Azets advisor.

Upcoming events

Webinar: NFP and Charity Online Update – 28 April 2026

Join us for our free NFP and Charity webinar on 28 April 2026 at 10:00am. We’ll be sharing the latest updates from the Charity Commission and welcoming two guest speakers who will be discussing investments and sustainability.

Register for the event here.

Webinar: Preparing for Change - The New Charity SORP and FRS 102 Explained – 4 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

Formal invitations will be shared soon.

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.

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 sector team.