What should my charity's financial year end be?

England and Wales: This page sets out the position in full — and it is the position every other page in this hub that mentions a 2026 threshold relies on. Scotland: covered, with a critical difference in principle, not just detail: Scotland’s threshold changes key off when the year begins, not when it ends — see below, because it means two charities with the same year end can be sitting on different rule sets. Northern Ireland: no threshold changed there, so only the SORP date is in play — see below.

Which rules does a charity’s financial year end trigger?

The dates of a charity’s financial year decide which of three new instruments apply to its accounts. All three took effect around the same time in 2026. But they do not all move on the same clock. If you get the basis for any one of them wrong, every threshold you cite after that is wrong too.

That is why the trustees should minute the date deliberately and notify their regulator: the Charity Commission, OSCR or the Charity Commission for Northern Ireland. This page assumes the books are already open; if not, open your books and choose your accounting basis first.

The England and Wales accounting thresholds attach to when the financial year ends. They apply to a year ending on or after 30 September 2026, whatever date that year began. The Charities SORP 2026, and the Scottish threshold change, both attach instead to when the reporting period begins: on or after 1 January 2026.

One instrument runs off the year’s end, and the other two off its start. Those are opposite directions, so they move independently of each other. That is what produces the collision. Each change is set out on its own in what changes on 30 September 2026.

The table shows which rules apply to real financial years, all twelve months long.

The marked row is the collision itself. Take an England and Wales charity whose year began before the SORP’s own start date. If that year ends on or after the new statutory threshold date, the charity gets the new, higher thresholds. But the 2026 SORP does not yet apply to it, so its accounts follow the outgoing 2019 SORP.

The SORP permits early adoption, but not where a jurisdiction’s regulations name the SORP and have not yet been amended to allow the new one.

The trigger is the year’s end, not the calendar year in which any of these rules changed. So the same charity can lawfully sit on different bases in two consecutive years. That is purely because of where its year end falls against these dates.

Why does a Scottish charity get the opposite answer?

A Scottish charity with that identical 1 October 2025 – 30 September 2026 year stays on the old Scottish thresholds. Scotland’s own change runs on the period-beginning basis, and that year began before the change took effect. An England and Wales charity with the same two dates already has the new thresholds, because its own test runs off the year’s end instead. Same dates, opposite answers, because the two nations’ instruments use opposite bases.

This is not a smaller version of the England and Wales point. It is a different mechanism that happens to land in the same table.

The Scottish audit threshold moves on the same period-beginning basis. A Scottish charity’s income is tested against £500,000 for financial years beginning before 1 January 2026; £1,000,000 for financial years beginning on or after 1 January 2026. That new figure applies only once the charity’s financial year begins on or after that same 1 January 2026 date — not before.

How do trustees set the accounting reference date?

An accounting reference date is the date a charity’s financial year is set to end each year. Minute the date deliberately, with the collision table in front of the trustees. Do not let it default to “twelve months from whenever we happened to register.”

For a new charity, the choice itself is covered in what our financial year end should be. This page covers what the date triggers.

The date decides more than when the year “happens” to fall. It decides which row of the collision table applies. It also decides when the filing deadline lands. When is my charity’s first annual return due, and what period does it cover? sets out that deadline.

For a charitable company, the date also interacts with Companies House’s own accounting period rules. The accounting reference date was already set once, at incorporation. How do I set up a charitable company, and what happens at Companies House? covers that step. The date can still be changed, but through Companies House’s own process, not just a trustees’ minute.

A charitable company’s small-company test: a fourth clock

A charitable company has a second test to keep separate from the charity thresholds. This is its own Companies Act small-company qualifying conditions. They decide its audit exemption as a company, not as a charity. Two of three conditions must be met, and two of the three are currently mid-transition:

• Turnover at or below £10,200,000 for financial years beginning before 6 April 2025; £15,000,000 for financial years beginning on or after 6 April 2025
• Balance sheet total at or below £5,100,000 for financial years beginning before 6 April 2025; £7,500,000 for financial years beginning on or after 6 April 2025
• Average employees at or below 50, which has not moved

The turnover and balance-sheet limits move on a fourth basis again: financial years beginning on or after 6 April 2025. That differs from every basis in the collision table.

Company-law turnover is also proportionately adjusted for a period that is not exactly twelve months. Nothing in charity law adjusts gross income that way. That is not a rounding difference, and the next section explains it.

Does a longer first accounting period change the income test?

No. Gross income is tested on the period as it was, unadjusted, whatever length that period is. The trap sits inside company law’s own generosity. Companies Act 2006 s.382(4), verbatim:

“For a period that is a company’s financial year but not in fact a year the maximum figures for turnover must be proportionately adjusted.”

There is no equivalent anywhere in the Charities Act 2011 or the Charities (Accounts and Reports) Regulations 2008.

Some trustees extend the first accounting period to a tidier date. They expect the longer period’s income to be pro-rated, the way a company’s turnover would be. They are wrong to expect that.

An eighteen-month period has eighteen months of income in it. It can cross a threshold that twelve months would not have crossed.

With the year end minuted, the next step is to set up your financial controls. When the first year closes, the same date decides which accounts to prepare.

Common mistake: reading the rule change as taking effect on a date, rather than attaching to a period

The shorthand used almost everywhere names a date and stops there — “the new thresholds apply from 30 September 2026.” The instrument in fact excludes financial years ending before that date. That is a different thing.

A charity whose year began well over a year before the instrument was made can still be caught by it. One whose year began later may not be. Trustees who work from the shorthand budget for the wrong scrutiny.

Common mistake: extending the first accounting period without checking the income effect

Extending to a tidier date is convenient, and company law pro-rates turnover. So it feels safe to assume the same protection applies to gross income. It does not. A longer period has more income in it, and can cross a threshold that twelve months would not have crossed.

Worked example

An England and Wales charity is choosing between a September and a December year end for its current financial year. A twelve-month year ending on the September date is caught by the new statutory thresholds. But the new SORP does not yet apply to it, because the period began before the SORP’s own start date. Its accounts follow the outgoing SORP.

A twelve-month year ending in December is caught by both. Nothing about the charity itself differs between the two options. Only the rule set changes, depending on the date chosen.