Charities accounting rules (SORP 2026) published

A revised Charities Statement of Recommended Practice (the “SORP”), has been published.

The SORP is relevant to charity auditors, independent examiners and others involved in preparing charity accounts, and will apply to accounting periods from 1 January 2026.

A thee-tier reporting structure has been introduced, so that only charities with annual income above £15m will be required to produce the most detailed accounts.

Trustee’s annual report requirements have been enhanced with guidance on how to report financial reserves, future plans and impact for beneficiaries. There is also updated guidance on how charities should report on social investments, aligning the terminology with the Charities Act 2011.

The new SORP can be accessed here.

Action point: Trustees should determine their charity’s reporting tier under the new SORP, and ensure compliance with the new requirements

Companies House forms and guidance updated to reflect ID verification requirement

There have been significant changes in company law in recent years, under the Economic and Crime Corporate Transparency Act 2023 (“ECCTA”).

A key change has been the introduction of ID verification for directors and other individuals at Companies House, starting on 18 November 2025.

Companies House has updated its forms and guidance accordingly to reflect the new requirements.

See the Companies House guidance on when you need to verify your identity (here) and the options for doing this (here). See also our firm’s article on ECCTA linked below.

Action point: Trustees of charitable companies need to ensure that they carry out ID verification, and that internal processes are generally updated to reflect ECCTA requirements

Revised Charity Governance Code launched

A revised version of the Charity Governance Code has been published. There were previously two separate Codes for small and large charities, but these have been replaced by a single Code, setting out eight key principles of good governance for charities to consider.

It is described as “a practical tool for trustees to encourage discussion about standards, behaviours and processes that are helpful in cultivating good governance”.

In our experience, the Code can be a useful reference tool, outlining the best practice approach for trustees, and is worth consulting when a board experiences a particular governance issue or difficulty.

The revised Code is available here.

Action point: Trustees are encouraged to benchmark their charity’s governance against the eight principles in the Code, to identify areas where improvements are needed.

Charities Act 2022: ex gratia reforms in force

Reforms to the ex gratia payment regime for charities came into force on 27 November 2025. Broadly, an ex gratia payment is one that a charity does not have a legal obligation to make, but where the trustees feel morally obliged to make it.

The previous law required charities to seek Charity Commission consent to any/all ex gratia payments.

The changes introduce a new statutory power allowing charities to make small ex gratia payments without prior authorisation from the Charity Commission. The size of permitted payments depends on the gross income of the charity in the previous financial year. Payments above the threshold will still need Charity Commission consent, although under a slightly amended statutory test.

Notably, certain property held by sixteen charities in England and Wales has been excluded from the new regime, due to concerns around the return of cultural artefacts by certain museums and galleries.

The Charity Commission’s amended guidance (CC7) can be found here.

Action point: Trustees who face a potential ex gratia  decision should take account of the revised law and guidance on this point.

Volunteer coastguard rescue officer ruled to be a worker (Court of Appeal)

In a recent employment case, Maritime and Coastguard Agency v Groom [2026] EWCA Civ 6, the Court of Appeal ruled that a volunteer Coastguard Rescue Officer could be classed as a “worker” for particular periods in which they attend activities for which they could claim payment.

The individual in this case had been a volunteer for 35 years before his position was terminated due to a disciplinary matter. The case focussed on his right to be accompanied by a trade union official to a disciplinary meeting.

This is a significant ruling for the charity and not-for-profit sector, which relies heavily on volunteer help. The rights of “workers” include payment of the National Minimum Wage, paid holiday, and whistleblower protection.

Action point: Trustees that have paid volunteers helping with their organisation’s activities should monitor this legal development and possible risks, liabilities and obligations arising.

Tribunal rules that dissolved  company cannot continue as unincorporated charity

The tribunal responsible for charity regulatory matters recently looked at the case of a charitable company which was dissolved at Companies House in 2012 but remained on the Charity Commission register – submitting annual returns until 2023.

In Ken Obetto v The Charity Commission for England and Wales [2025] UKFTT 1395 (GRC), the tribunal found that once the incorporated charitable company was dissolved, it ceased to exist as a legal entity.

Under provisions in the Charities Act 2011, the Charity Commission was therefore required to remove from the register any charity which has ceased to exist.

Once a company is dissolved it cannot operate as a charity or be treated as one for regulatory purposes.

Action point: This is a novel matter, but a reminder that trustees are responsible for confirming the legal and regulatory basis on which they are operating.

The Employment Rights Act 2025 is here: what does it mean for employers

See comments here from our Employment team on the implications of this key piece of legislation for employers, which involves the greatest changes to employment law in over a decade.

Action point: Trustees of organisations that employ staff need to be aware of the impact of this new legislation.

Key changes and impacts for UK companies from 18 November 2025

See our firm’s article here on some of the key changes introduced by ECCTA.

Action point: Trustees of charitable companies need to be aware of the legal changes introduced by ECCTA, including ID verification for Companies House, but also changes to the requirements to maintain certain statutory registers.