What does our trustees' annual report have to include?

England and Wales: researched. Scotland: partial — the SORP tier structure applies identically, but the content of the receipts-and-payments route was not researched at this level of detail. Northern Ireland: partial — same split as Scotland.

Two questions, in this order

First: do you prepare accruals accounts or receipts and payments accounts? If you prepare receipts and payments accounts, the SORP’s own scope statement is direct — a charity in that position is “not required to apply the accounting recommendations of this SORP” and instead “must refer to the regulatory requirements of their jurisdiction(s) of registration regarding the format and content requirements for receipts and payments accounts and the trustees’ annual report.” For England and Wales, that means the Charities (Accounts and Reports) Regulations 2008, reg 40, rather than the SORP’s own tiers.

Second, if you are on accruals: which SORP tier are you in? That decides how much the report should cover.

Get the order wrong and you will spend a morning reading requirements that do not apply to you.

Tier 1 is not a cut-down Tier 2

Tiering reads like a size discount — smaller charity, less of the same. It is not how this works.

Tier 1 has its own itemised list, and the SORP treats everything on it as a minimum for every accruals charity, whatever the tier. What Tier 2 and Tier 3 add is qualitatively different: strategy, success criteria, formal impact assessment, principal risks including environmental ones, investment policy. Not more paragraphs on the same subjects — different subjects.

So a Tier 1 charity should not try to produce its report by taking a Tier 2 template and deleting sections. Working from the Tier 1 list itself is the more reliable route.

Two things newly bind the smallest accruals charities

If you are about to reuse last year’s report for a period beginning in 2026, two things will not be in it.

Volunteers. Every accruals charity should now explain the scale and nature of volunteer activity and input. This moved from another module of the SORP, which is why it is so easy to miss.

Plans. Every accruals charity should give a summary of its plans for the future.

Both sit on the Tier 1 list. Neither is in a report written before them.

The reconciliation people miss

The reserves figure stated in the report should be consistent with the accounts — and where the connection is not evident on the face of them, the SORP says the charity should provide a reconciliation. Reports routinely state a reserves figure that a reader cannot trace, and the SORP is now explicit that a bare figure is not enough on its own.

Two different effective dates, same year

This will catch people, so it is worth being slow about.

The SORP applies to reporting periods beginning on or after 1 January 2026. The accounting threshold changes in SI 2026/427 apply to financial years ending on or after 30 September 2026.

Same charity, same year, two different tests. A charity with a 31 December year end is inside the new SORP for the year beginning 1 January 2026 but not inside the new thresholds until the year ending 31 December 2026. Check each separately; do not assume one date governs both.

One point is genuinely contested

Whether impact reporting is mandatory for the smallest accruals charities.

The SORP’s own Summary of Changes says impact reporting is “now a ‘must’ for all charities”. The operative Module 1 text places the impact paragraph under the Tier 2 heading, with Tier 1’s own obligation being a summary of achievements. Those two statements do not sit together, and this page is not going to pick a side.

What we would do: if you are Tier 1 and reporting on impact would take an hour, write something. The cost of including it is small, and the cost of being on the wrong side of an ambiguity in a document a regulator reads is not.

Build the checklist

One page: your accounting basis, your tier if you are on accruals, and the itemised list that follows from them. Agree it at a board meeting before anyone starts drafting. It saves the argument about whether a section is needed, and it is what you hand to whoever writes the report next year.

Common mistake: treating a Tier 1 report as a cut-down Tier 2 report

Tiering reads like a size discount. Tier 1 has its own itemised list; Tier 2 and Tier 3 add qualitatively different obligations — strategy, impact, risk, ESG — rather than more of the same at greater length.

Common mistake: reusing last year’s report unchanged for a period beginning in 2026

Two things newly sit on the Tier 1 list for every accruals charity: an explanation of the scale and nature of volunteer input, and a summary of plans for the future. Last year’s report has neither.