What’s the new 3 tier charities reporting framework?

Charity financial reporting is going through a notable shift, and we think finance and trustee teams across the sector will benefit from the clear explanation in Zaynab Aswat’s latest blog. In her piece on the UHY UK website, Zaynab walks through a new three-tier reporting framework being introduced under SORP 2026, which reshapes how charities prepare their accounts and disclosures.

Under this updated regime, charities will be placed into one of three reporting tiers based solely on their gross income for the year. Unlike previous approaches that considered averages over several years, the new system bases tier placement directly on income in the reporting period.

• Tier 1 applies to charities with gross income up to £500,000, offering a more proportionate and simplified set of disclosures.
• Tier 2 captures charities with between £500,000 and £15 million of gross income, requiring more detailed reporting.
• Tier 3 covers organisations with gross income above £15 million, bringing comprehensive reporting obligations, including cash flow statements and expanded narratives on aspects such as volunteering and sustainability.

Zaynab also highlights that SORP 2026 strengthens going-concern disclosures across all tiers. Trustees will now need to state clearly whether the charity is a going concern and explain their judgement, with forward-looking information playing a central role in that assessment.

If you’re preparing for the changes that take effect for periods starting on or after 1 January 2026, we recommend you download the Action Plan. Understanding where your charity sits in the new framework will help you plan for updated disclosures and reporting requirements.

Find out more in our factsheet or just get in touch. We’d be happy to help you.

Read also how we help charities and NFPs with accountancy, audit and advisory services.

Original article by Zaynab Aswat on the UHY UK website.