Which SORP tier is my charity in, and what does that change?

England and Wales, Scotland and Northern Ireland: the same position throughout. The Charities SORP fixes its three tiers UK-wide, on gross income alone, with no jurisdictional variation.

How is a charity’s SORP tier decided?

A SORP tier is the income band that decides which of the Charities SORP‘s tiered requirements apply to an accruals charity. The SORP has three tiers, and the treasurer tests the charity against them each reporting period. The bands are the same in England and Wales, Scotland and Northern Ireland. The regulator makes no difference, whether it is the Charity Commission, OSCR or the Charity Commission for Northern Ireland.

This page assumes you already know the charity prepares accruals accounts; if not, first determine which accounts to prepare.

Three features of the test catch people out. All three are deliberate, not oversights.

Income only. The tier is set only by gross income. That is the statutory figure that also decides your accounts basis and the scrutiny you need. It is not the total income line on the face of the statement of financial activities.

Company law also uses employee numbers and total assets to decide small-company status. The tier test expressly leaves them out. They still matter separately. They decide the cash flow statement exemption, which runs on its own, different rule.

Every year, with no smoothing. Company law lets a size change bed in over two consecutive years before it counts. The SORP does not do this. The SORP requires a charity to reassess its tier each reporting period on that period’s gross income alone.

A charity near a boundary will flip from year to year. Its comparatives will then have been prepared under another tier’s rules. A two-year rule was proposed during the SORP’s own consultation. The SORP-making body concluded this “would not be the right choice at this time”.

The SORP-making body has promised to consult further in this area. It is not a closed question, but it is not the current rule either.

A subsidiary charity assesses its own tier, independently of its parent’s income. A large parent charity does not automatically drag a small subsidiary charity into a higher tier.

Which parts of the SORP does tiering relax?

Tiering relaxes five modules of the SORP only, not the whole document. It reads as the headline easing of the 2026 SORP, so many people assume it covers everything. The five modules are:

• the trustees’ annual report
• the statement of financial activities
• allocating costs by activity
• remuneration and related-party disclosure
• the statement of cash flows

The SORP-making body says why, in terms. It cannot exempt a charity from anything the underlying financial reporting standard requires. It can add and tier its own requirements, but it cannot take away what the standard itself demands.

The result is this. The two main changes the 2026 SORP carries over from FRS 102 are lease accounting and income recognition. They apply in full to the smallest Tier 1 accruals charity in the country, exactly as they apply to the largest. A one-employee CIO with a single photocopier lease and a single grant is inside both changes.

What tiering does relax is mainly in the trustees’ annual report. Tier 1’s own content list is a minimum set in its own right, not a cut-down version of Tier 2’s. The reporting hub covers that list: Establish which tier you are in and what your report must contain.

Read the full module-by-module picture at What is the Charities SORP and which tier am I? rather than working from a summary. This page is for finding the tier, not for repeating in full what it changes.

Are SORP tier boundaries the same as the legal thresholds?

No, although the figures can coincide. In England and Wales, from the 2026 effective date, the Tier 1 ceiling matches two other figures: the accruals-accounts boundary and the qualified-examiner threshold. That makes them look like one rule with three names. They are three separate regimes, from three separate sources, on three separate effective bases.

The figures do not coincide in Scotland or Northern Ireland at all. There, the accruals boundary sits at a different figure from the SORP tier ceiling. A Scottish charity above its own accruals threshold but below the Tier 1 ceiling must still prepare accruals accounts as a Tier 1 charity.

The same charity in England and Wales, in the same position, could opt out of the SORP altogether by choosing receipts and payments. That option is open only to a charity that is not a company.

Do not treat “below the Tier 1 ceiling” and “below the accruals boundary” as the same test.

Do not use the SORP’s own appendix threshold table or its paragraph-35 signpost for the England and Wales receipts-and-payments boundary either. Both were published before the England and Wales instrument was made. They are already out of date for England and Wales. Both still give the figure Scotland uses.

Which SORP edition applies to your year?

The 2026 SORP applies to reporting periods beginning on or after 1 January 2026. The statutory accounting thresholds work the other way. They attach to financial years ending on or after their own effective date. The two are announced together, and people often blur them into one date.

Some year ends get the new statutory thresholds while still reporting under the previous SORP. The year-by-year table is in set your financial year end. Transition to the 2026 SORP covers which of your years is first affected. It also covers what to do about the transition itself.

This page determines the tier for a period you already know is on the 2026 SORP. If you are not yet sure which SORP your year falls under, start there.

Impact reporting for the smallest charities

Whether a Tier 1 charity has to report on its impact used to look contested. Read against the SORP text, it is not.

At every tier, the SORP requires a summary of the charity’s main achievements. At Tier 1 it adds questions about the difference the work made, which trustees “should” consider. A should that is not followed is not a departure from the SORP. From Tier 2, the SORP requires the report to explain the impact the charity is making.

So impact reporting is not a SORP requirement at Tier 1. But it is not a question Tier 1 trustees can skip: the SORP says they should consider it. The SORP encourages Tier 1 charities to include Tier 2 information they consider relevant. Read the fuller treatment at What is the Charities SORP and which tier am I?. How to write the report itself is covered in write your impact report.

With the tier found, the next step is to build your lease register: the lease rules apply at every tier.

Common mistake: assuming the tier boundaries are the legal thresholds

In England and Wales the lowest tier ceiling now matches the accruals boundary and the qualified-examiner threshold. That makes them look like one rule. They are separate regimes with separate effective bases. In Scotland and Northern Ireland the figures do not coincide at all.

Common mistake: expecting the tier to be smoothed across years

Company law smooths a size change over two consecutive years, so accountants expect the SORP to do the same. It does not. Tier is reassessed annually on that year’s gross income alone, and a charity near a boundary will flip.

Common mistake: believing the lowest tier is exempt from the new lease and income rules

Tiering reads as the SORP’s headline easing, so people assume it runs through the whole document. It operates in five modules only. The lease accounting module and the income recognition module both apply in full to the smallest accruals charity, whatever its tier.

Worked example

A charity’s income rises above the Tier 1 ceiling for a single year and falls back the year after. For the year it is over the ceiling, it is a Tier 2 charity. The SORP requires it to present its statement of financial activities on the activity basis. It also has to meet the Tier 2 additions to the trustees’ report, on top of everything Tier 1 already required.

The following year it reverts to Tier 1. Its comparatives were then prepared under Tier 2’s rules.