What does our trustees' annual report have to include?

England and Wales: This page sets out the position in full. Scotland: partly covered — the SORP tier structure applies identically, but the content of the receipts-and-payments route has not been established at this level of detail. Northern Ireland: partly covered, on the same basis as Scotland.

What decides what a trustees’ annual report includes?

Two things decide it, in this order: the accounting basis, then the SORP tier. The order is the same whether the report goes to the Charity Commission, OSCR or CCNI. A trustees’ annual report is the narrative the trustees prepare each year alongside the accounts. It explains what the charity did, what it achieved and how it is run.

This page assumes you know a report is due; see confirm which filings actually apply to you.

First, check whether you prepare accruals accounts or receipts and payments accounts — the choice made when you determine which accounts to prepare.

If you prepare receipts and payments accounts, the scope statement of the Charities SORP is direct. A charity in that position is “not required to apply the accounting recommendations of this SORP”. Instead, it “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, determine your SORP tier. The tier 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.

Is a Tier 1 report a shortened Tier 2 report?

No. Tiering reads like a size discount — smaller charity, less of the same. That is not how this works.

Tier 1 has its own itemised list. 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, an explanation of impact, 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.

Outside the report, tiering does lift one duty, though not from Tier 1. The SORP requires only a Tier 3 charity to prepare a statement of cash flows. The relief is Tier 2’s: the previous SORP’s own threshold was the Tier 1 ceiling.

What is new for the smallest accruals charities?

Four items are new on the Tier 1 list. Two are in the narrative: volunteers and plans. Two are in the financial review: going concern where there are no reserves, and the reserves reconciliation. If you are about to reuse last year’s report for a period beginning in 2026, none of them will be in it.

Volunteers. The SORP now requires every accruals charity to explain the scale and nature of volunteer activity and input. This item moved from another module of the SORP. That is why it is so easy to miss.

Beyond the Tier 1 list, the SORP says a charity in Tier 2 or Tier 3 should also give the number of volunteers. It may give the contribution in hours or full-time equivalents, where that is practicable.

Plans. The SORP now requires every accruals charity to give a summary of its plans for the future.

Going concern. A charity with no reserves, or negative net assets, now has to explain why it is still operating as a going concern.

All four sit on the Tier 1 list. None is in a report written before them. The reconciliation is the next section.

The reserves figure and the accounts

The SORP requires the reserves figure stated in the report to be consistent with the accounts. Where the link is not evident on the face of the accounts, it requires a reconciliation. That goes either in the funds note or in a separate note.

Reports routinely state a reserves figure that a reader cannot trace. The SORP is now explicit that a bare figure is not enough on its own. The wording is covered where you draft your financial review and reserves reconciliation.

Legacies are new for Tier 2 and Tier 3. The SORP says the financial review should also explain the effect of a material legacy recognised before the money arrives.

Two effective dates in the same year

The new SORP and the new accounting thresholds start on different tests, so one charity can meet them in different years. This will catch people, so take it slowly.

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. Take a charity with a 30 September year end. Its first year under the new thresholds began before the SORP’s effective date. So for that year it has the new thresholds, but it follows the previous SORP unless it adopts the new one early where that is allowed. Check each date separately. Do not assume one date governs both.

Impact reporting at Tier 1

The SORP draws the line clearly. It requires a summary of the main achievements at every tier. It requires an explanation of the charity’s impact, and of the long-term effect of its activities, from Tier 2 upwards. That paragraph sits under the Tier 2 heading.

For Tier 1, the SORP says the trustees should consider how the work made a difference to beneficiaries’ circumstances, and whether it provided wider benefits to society. So impact reporting is not a Tier 1 requirement. But a Tier 1 report that says nothing about the difference made has skipped what the SORP asks trustees to consider.

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. How to write about impact is covered where you write your impact report.

The report content checklist

The checklist fits on one page. It records your accounting basis, your tier if you are on accruals, and the itemised list that follows from them.

One reference detail may be left off the checklist. The SORP allows a chief executive’s or other senior staff member’s name to be omitted where that could place them in personal danger. It no longer asks for an explanation.

Agree it at a board meeting before anyone starts drafting. It saves the argument about whether a section is needed. It is also what you hand to whoever writes the report next year.

With the checklist agreed, the next step is to draft the narrative sections of your report.

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 adds qualitatively different obligations — strategy, impact, risk — and Tier 3 adds environmental, social and governance reporting. They do not add more of the same at greater length.

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

Four things are new on the Tier 1 list for every accruals charity:

• an explanation of the scale and nature of volunteer input
• a summary of plans for the future
• where there are no reserves or net assets are negative, an explanation of why the charity is still a going concern
• a reserves reconciliation, where the reserves figure does not obviously match the accounts

Last year’s report has none of them.