Prepare charity accounts using SORP

The rules here are for charities registered in England and Wales.

Choose the type of accounts

There are two types. Receipts and payments accounts show the money that came in and went out during the year, with a statement of assets and liabilities at the year end. Accruals accounts give a true and fair view: a balance sheet, a statement of financial activities showing all money received or due and spent or incurred, and explanatory notes.

A charitable company must always prepare accruals accounts. A trust, unincorporated association or charitable incorporated organisation (CIO) may use receipts and payments accounts if its gross income is within the threshold below, unless its governing document or a funder requires accruals accounts or the trustees choose them.

For receipts and payments accounts, gross income is your total receipts for the year, leaving out proceeds of selling investments or fixed assets, endowment funds you receive and loans received. For accruals accounts it is total income in the statement of financial activities across all funds, leaving out endowment funds you receive.

Check the thresholds

Between the examination and audit thresholds you choose either, unless your governing document or a funding agreement requires an audit. Group accounts are for a parent charity with subsidiaries, such as a trading company. Below the group threshold you may prepare them voluntarily.

Follow the SORP

If you prepare accruals accounts, follow the Charities SORP, or a sector SORP such as the Housing SORP for registered social housing providers.

Arrange an independent examination or audit

An independent examination is a lighter review that checks the accounts match your records. An audit gives an opinion on whether the accounts are true and fair and must be done by a registered auditor. The Charity Commission can require an audit where there may be misconduct or mismanagement. A charitable company that must be audited under charity law but not under the Companies Act states on its balance sheet that it is exempt from a Companies Act audit.

Write the trustees' annual report

One or more authorised trustees date and sign the report.

If you prepare accruals accounts, the report follows SORP 2026 headings such as objectives and activities, achievements and performance, financial review, plans for future periods, and structure, governance and management. If your accounts must be audited, the report must also cover your fundraising.

File with the Charity Commission

What you send depends on your income:

• under £10,000, you report only your income and spending
• from £10,000 to £25,000, you answer the annual return questions and send no documents
• over £25,000, you also upload the trustees' annual report, the accounts and any examiner's or auditor's report, and declare that you have reported all serious incidents

Give the public your accounts and trustees' annual report on request.