SORP 2026 vs SORP 2019: Every Change Explained

Last reviewed: 02/07/2026 Written by Ivan Siyanko, who runs a UK registered charity.

TL;DR

SORP 2026 replaces SORP 2019 for charity accounting periods starting on or after 1 January 2026.

The biggest change is structural: a new three-tier reporting framework (Tier 1 under £500k, Tier 2 £500k–£15m, Tier 3 over £15m) replaces the previous one-size regime.

The threshold for SORP-compliant accruals accounts doubled from £250,000 to £500,000 — more small charities can use simpler accounting.

A new five-step income recognition model applies to exchange transactions (contracts, fees, sales).

In the trustees’ annual report, impact narrative, future plans, and volunteer contribution move from “good practice” to required, and the reserves figure must reconcile to the accounts.

If you reported under SORP 2019, the move to SORP 2026 is the biggest change to charity accounting in years — but for most small charities it’s lighter, not heavier. This guide sets the two standards side by side, change by change, so you can see exactly what’s different and what it means for your charity.

For the full walkthrough of the new standard, start with our SORP 2026 trustee guide. This page focuses purely on what changed from SORP 2019.

The short answer

SORP 2026 keeps the same foundations as SORP 2019 — it’s still built on FRS 102, still issued by the UK charity regulators, still requires a trustees’ annual report and accounts. What changed is the shape: reporting is now proportionate to income through three tiers, several previously-optional narrative sections became mandatory, and income recognition for contracts follows a new five-step model. SORP 2026 applies to accounting periods starting on or after 1 January 2026; SORP 2019 still governs everything before that date.

SORP 2019 vs SORP 2026 — the master comparison

Area	SORP 2019 (FRS 102)	SORP 2026	What it means for you
Reporting structure	Single framework, scaled mainly by audit thresholds	Three tiers by gross income: Tier 1 < £500k, Tier 2 £500k–£15m, Tier 3 > £15m	Most charities are Tier 1 — explicitly lighter reporting
SORP-accruals threshold	£250,000	£500,000	More small charities can use simpler receipts-and-payments accounts
Income recognition	Recognised on entitlement, probability, measurement	Five-step model for exchange transactions (FRS 102 Section 23)	Mainly affects contracts/fees; most grants and donations are largely unchanged
Impact in the annual report	Good practice, not required	Required for all tiers	You must describe the difference made, not just activities
Future plans	Encouraged	Mandatory at all tiers	A written, board-approved forward look is now expected
Volunteer contribution	Optional narrative	Required disclosure	Report volunteer roles/hours/value where reasonably calculable
Reserves	Stated in narrative	Narrative figure must reconcile to the accounts	Your stated reserves must match the balance sheet, with differences explained
Cash flow statement	Required for larger charities	Mandatory only at Tier 3 (over £15m)	An easement — fewer mid-sized charities need one
ESG / sustainability	Not a SORP requirement	Mandatory for Tier 3 only	Small and mid charities can ignore; £15m+ charities must act
Effective date	Periods from 1 Jan 2019	Periods starting on/after 1 Jan 2026	SORP 2019 still applies to earlier periods

Change 1 — A proportionate, three-tier framework

The headline change. SORP 2019 applied broadly the same disclosure expectations to a £60,000 community group and a £4m charity, with relief mostly tied to audit thresholds. SORP 2026 replaces that with three tiers set by gross annual income:

Tier 1 — under £500,000: the great majority of UK charities. Simplified disclosures, income and expenditure by natural classification, no mandatory cash flow statement.
Tier 2 — £500,000 to £15m: expanded analysis by activity and more detailed reserves disclosure.
Tier 3 — over £15m: full regime, including a mandatory cash flow statement and ESG/sustainability narrative.

Not sure which applies to you? Use the SORP 2026 tier checker — enter your income and it returns your tier and the obligations that come with it.

Change 2 — The accruals threshold doubled to £500,000

Under SORP 2019, charities preparing accruals accounts were drawn in at £250,000 income in England and Wales. SORP 2026 doubles that to £500,000. In practice, more small charities can now use simpler receipts-and-payments accounting (where eligible and not required to audit), reducing the compliance load for the smallest organisations. If you sit just under £500k, talk to your accountant about whether simpler accounts are now an option for you.

Change 3 — A five-step income recognition model

This is the most technical change and the one most likely to need professional advice. SORP 2026 introduces a five-step model for exchange transactions — where your charity provides goods or services of roughly equal value in return for income (a paid course, a delivery contract with a council, ticket sales).

Identify the contract.
Identify the performance obligations.
Determine the transaction price.
Allocate the price to each obligation.
Recognise income as each obligation is satisfied.

Non-exchange income — donations, fundraising, and most foundation grants — is largely unaffected. So a charity funded mainly by grants and donations will feel this minimally; a charity delivering paid contracts to a local authority should ask its accountant how the timing of its income changes.

Change 4 — The trustees’ annual report does more

SORP 2019 treated impact and forward-looking narrative as good practice. SORP 2026 makes several of these required:

Trustees’ annual report element	SORP 2019	SORP 2026
Impact / difference made	Good practice	Required (all tiers)
Plans for the future	Encouraged	Mandatory (all tiers)
Volunteer contribution	Optional	Required disclosure
Reserves reconciliation	Narrative figure	Must reconcile to the accounts
ESG / sustainability	Not required	Mandatory (Tier 3 only)

For a Tier 1 charity, the single biggest shift is the impact narrative: you now need to articulate what changed for the people you serve, not just what you did. If you don’t yet collect outcome data, SORP 2026 is the prompt to start. (We cover this in depth in the SORP 2026 impact narrative guide.)

From CharityIQ

The mechanics didn’t get harder — the narrative did. The new report wants impact, future plans, volunteer value and a reconciled reserves position, in plain English.

CharityIQ drafts a tier-aware Trustees’ Annual Report from your live charity data, flags the sections SORP 2026 now requires, and cites every figure. Trustees review and approve. See how it works.

What did not change

To keep this in proportion, several things carry over from SORP 2019:

It’s still based on FRS 102 and issued by the Charity Commission (England & Wales), OSCR, and CCNI.
You still file your trustees’ annual report and accounts within 10 months of your financial year-end.
The fund accounting model (restricted, unrestricted, endowment) is unchanged.
Most donation and grant income recognition principles continue as before.

When does the switch happen for your charity?

SORP 2026 applies to accounting periods that start on or after 1 January 2026 — so the first set of accounts affected depends on your year-end:

31 December year-end: first SORP 2026 accounts = year ending 31 December 2026 (file by 31 October 2027).
31 March year-end: SORP 2019 still applies to year ending 31 March 2026; SORP 2026 first applies to year ending 31 March 2027 (file by 31 January 2028).
30 June year-end: SORP 2026 first applies to year ending 30 June 2027 (file by 30 April 2028).

Frequently asked questions

Q: Is SORP 2026 harder than SORP 2019? A: For most small charities, no — it’s designed to be lighter. The three-tier framework reduces disclosure for Tier 1 (under £500k), and the accruals threshold doubled to £500,000. The added work is narrative: impact, future plans and volunteer contribution are now required.

Q: When does SORP 2026 replace SORP 2019? A: For accounting periods starting on or after 1 January 2026. Earlier periods still report under SORP 2019. If your year-end is 31 March 2026, you report that year under SORP 2019.

Q: What’s the single biggest change from SORP 2019? A: The move to a three-tier, income-based reporting framework, alongside making impact narrative and future plans mandatory in the trustees’ annual report.

Q: Did the income recognition rules change for grants? A: Most foundation grants are non-exchange income and are largely unaffected. The new five-step model applies primarily to exchange transactions — contracts, fees and sales. Ask your accountant about any service-delivery contract.

Q: Do we still need a cash flow statement? A: Only Tier 3 charities (over £15m) face a mandatory cash flow statement under SORP 2026 — an easement compared with the previous regime. FRS 102 may still apply in specific cases; confirm with your accountant.

What to do next

Confirm your tier and your first SORP 2026 year using the tier checker.
Start your impact narrative now — it’s the biggest new ask for Tier 1 charities and the hardest to write at the last minute.
Flag any contract income to your accountant for the five-step model.

For charities that want the new trustees’ annual report drafted from their own data — impact, reserves, future plans, all cited — that’s exactly what we built CharityIQ for.

Ready for SORP 2026 without the spreadsheet panic? Tier-aware drafts. Audit trail by default. Join Waitlist →

Written by Ivan Siyanko, founder of CharityIQ. Ivan runs a UK registered charity and built CharityIQ because the existing tools weren’t built for what trustees actually need.

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