What notes do charity accounts have to include?

England and Wales: This page sets out the position in full. Scotland: the same SORP note requirements, with no difference in principle. Northern Ireland: the same SORP note requirements, with no difference in principle.

The related party note when there were no transactions

If there were no related party transactions in the year, the notes to the accounts still need a related party note. The SORP requires it to say so positively — not say nothing. The rule is the same in England and Wales, Scotland and Northern Ireland. This page assumes the primary statements are built; if not, first build your Statement of Financial Activities and build your balance sheet.

Disclosing that nothing happened can feel wrong. That instinct causes the most common substantive failure in charity accounts. Silence is read as an omission, never as good news.

The scale of the problem is measured, not guessed at. Among the smallest band of accruals charities the Charity Commission reviewed, only 55% fully disclosed related party transactions. Among the largest, 86% did.

Worse, look at the accounts that failed on this point but had already been through an independent examination or audit. In none of them did the scrutineer report the failure to the regulator. Most trustees assume there is a safety net. It is not a reliable one.

Set up a related party register and annual declarations builds the register that prevents this. This note states what the register found, including a real absence.

What the notes to the accounts cover

Have the earlier working papers to hand. They include the records from record your first restricted grant, the lease register and any investment policy.

Beyond the related party note, a full set of notes covers four more things:

• accounting policies, including which SORP the accounts follow — the section on naming the right SORP explains this
• the fund analysis, which ties the movement on each fund to the figures on the Statement of Financial Activities and the balance sheet
• staff and trustee remuneration, including staff costs disclosed at the level your charity’s tier requires; see also can charity trustees be paid?
• the lease disclosures that are new this year

The lease disclosures that are new this year

The SORP requires a charity that uses the short-term or low-value lease exemptions to say so and to disclose the amount of its remaining commitments. It shows this separately for each exemption, split by maturity band. Beyond the exemptions, the SORP requires every charity with leases to disclose certain amounts for the year, whatever the size of its leases:

• interest expense on lease liabilities
• the expense for variable lease payments not included in the liability
• any income from subletting
• total cash outflow for leases in the year

Taking an exemption is not the end of the disclosure duty. It changes what has to be disclosed, not whether anything does.

The accounting policies note: naming the right SORP

The SORP requires the accounting policies note to state whether the accounts follow the SORP. That means naming the edition of the SORP the accounts are prepared under. This is a benchmark test in its own right.

In the years either side of a SORP change, a template that is otherwise up to date can carry the last edition’s wording forward. That risk is unusually high. Check this note. Do not assume a template update caught it.

The SORP itself deals with a related but narrower point. Some jurisdictions’ regulations name the SORP that accounts are prepared under. There, the SORP says it cannot be adopted until new regulations are made allowing its use. So the edition the note names has to be one the regulations permit.

Naming the right edition does not excuse getting the substance of the accounting wrong.

Tier also matters here. The SORP requires a charity to assess its own tier for each reporting period. That decides which notes apply in full.

Tier is covered fully in determine your SORP tier and, for the Statement’s presentation, in the Statement of Financial Activities step. Tiering affects five modules. One of them is remuneration and related-party disclosure.

The disclosures that only apply once

A charity’s first year under SORP 2026 carries its own, one-off set of notes:

• a description of the transitional provisions applied
• the current-period adjustment from the new lease rules, or an explanation of why restating it was impracticable
• the matching disclosure for the revenue recognition changes
• disclosure of any practical expedients used on transition

Each of these can be missed because it is needed only once. You have no note from last year to copy forward. No template inherited from last year will already have a place for it.

With the notes drafted, the next step is to assess going concern: the conclusion the whole set of accounts is prepared on.

Common mistake: omitting the related party note where there were no transactions

Disclosing that nothing happened feels wrong. The SORP requires a positive statement where there were none. Many practitioners miss it. This is the largest single cause of accounts failing the regulator’s benchmark.

Common mistake: not disclosing the lease exemptions taken

Taking an exemption feels like the end of the matter. It is not. The SORP requires a charity that uses the short-term or low-value exemptions to disclose the amount of its commitments under each. It shows each one separately, split by maturity band.

The mandatory disclosures still apply, whatever exemption is taken. They cover interest, expense, variable payments, sublease income and total cash outflow.

Common mistake: not stating which SORP the accounts were prepared under

The template carries the last edition’s wording forward. No one checks the accounting policies note on its own. Naming the SORP is a benchmark test in its own right. The risk of naming the wrong edition is unusually high in a transition year.

Worked example

Tollgate Youth CIO has no related party transactions to report this year. No trustee, connected person or connected entity supplied anything to the charity or received anything from it. The notes to Tollgate’s accounts still carry a related party note, stating plainly that there were none.

Tollgate could leave the note out because there is nothing to say. On its own, that would be the largest single reason those accounts might fail the regulator’s benchmark.