New SORP requirements for the 2026 Trustees’ Annual Report: What charities need to know

New Charities Statement of Recommended Practice (SORP) requirements were published on 31 October 2025 and apply to accounting periods beginning on or after 1 January 2026. These changes affect all registered charities preparing a Trustees’ Annual Report (TAR), in compliance with the Charities SORP.

One of the goals of the enhanced framework is to improve the way charities set out their narrative in the TAR.

Bitesize briefing

New disclosure requirements apply across the revised tier structure to improve the quality and detail of reporting. Charities that apply the SORP in full must now:

• provide a fuller short- and long-term narrative on objectives and activities, as well as plans for future periods
• report on their impact for beneficiaries. Prompt questions are provided in the SORP to assist with measuring impact
• elaborate on the status of their legacies in relation to financial accounts
• establish a clearer picture of reserves, and how these tie to the charity’s reserve policy, with greater detail on risk strategy where no reserves are held
• provide greater clarity on the number and function of volunteers, along with the nature and scale of their contributions
• report on their environmental, governance, and social policy progress

Not every change applies to all tiers, but the overall goal is to give better transparency and accountability, as well as more robust financial reporting that better serves stakeholders, such as donors and members of the public.

New tier structure

The updated structure assigns charities to three tiers for the purpose of SORP reporting, calculated annually according to gross income only:

• Tier 1: Gross income not more than €500,000
• Tier 2: Above €500,000 but not more than €15 million
• Tier 3: Above €15 million

What is required for each tier?

SORP still distinguishes between information that charities must, should, and may report.

Tier 3 charities have mandatory reporting in several cases, whereas it is optional for smaller Tier 1 charities, although there are certain exemptions from disclosure available. For example, charities supporting vulnerable beneficiaries or those working in sensitive environments may justify withholding certain information. However, where information is omitted, charities must still explain the reasoning behind the omission.

The Trustees’ Annual Report covers the following categories, with the requirements listed per tier.

Objectives and activities

All tiers

• Purpose and main activities of the charity
• Explanation of scale and nature of volunteer roles
• Explanation of the activities, projects, or services included in the accompanying accounts. Figures should be consistent with the statement of financial activities

Tiers 2 and 3 only

• Detailed view of trustees’ short- and long-term aims and objectives, and the scale and resources allocated
• Detailed emphasis on targets, performance measurement and strategy and how these have supported aims and objectives
• Explanation of grant-making and social investment policies
• Detailed explanation of general volunteer contribution (hours or staff equivalents) and activities, including the number of volunteers and details of the support they help to provide

Achievements and performance

All tiers

• Summary of main achievements in terms of target beneficiary and broader society benefits. Outline in what way the charity’s work has made a difference to the circumstances of its beneficiaries and/or how the charity’s work has provided wider benefits to society as a whole

Tiers 2 and 3 only

• Assessment of how well the charity performed in activities, investments, and impact, including the methods used to measure each metric
• Details of factors that impact activities and how these affect future plans

Tier 3 only

• Details on material fundraising performance in terms of net income return against initial objectives, and how material expenditure impacted, or will impact, returns

Financial review

All tiers

• Overview of financial position (consistent with the financial statements), detailing:
  • Any fund or subsidiary deficits
  • Policies for holding reserves, and their amount and location
• Explanation of any discrepancies between reserves held and reserves policy, and measures in place to resolve these. If no reserves are held, an explanation of why, and how the charity plans to operate as a going concern

• Details of any material uncertainties that affect the charity’s ability to continue to operate as a going concern

Tiers 2 and 3 only

• Explanation of the principal sources of income and how these resources are spent to support charity objectives
• Description of key risks facing the charity, including environmental and cybersecurity, with plans to mitigate those risks
• Report on significant events that have affected financial performance and position, covering principal sources of income and risks
• Explanation of investment policies, including their social, environmental and ethical considerations
• Explanation of any pension liability or material legacy income impacts

Tier 3

• Explain any factors that are likely to affect the financial performance or position going forward

Plans for future periods

All tiers

• Summary of the charity’s plans for the future, which may include reserves assessment

Tiers 2 and 3 only

• Detailed summary of future plans and activities to support them
• Elaboration on how lessons learned influence future plans

Structure, governance and management

All tiers

• Details of the nature of the governing document, the constitutional structure of the charity, and the process for appointing new trustees. Charities may withhold certain details where exemptions from disclosure apply

Tiers 2 and 3 only

• Explanation of the charity’s and any subsidiary’s organisational structure
• Explanation of the policies for the induction and training of trustees
• Explanation of governance and management structures and procedures, covering:
  • Decision-making, e.g., trustee vs staff
  • Pay and remuneration, with benchmarks and criteria
  • Affiliations, including subsidiaries and partnerships
  • Explanation of how these network partnerships affect operating policies

Reference and administrative details

All tiers

• Provide reference and administration information, including name, registration number, address, trustee names, and corporate trustees. Charities may withhold certain details where exemptions from disclosure apply

Tiers 2 and 3 only 

• Must report the names of auditors and delegated officials, including the CEO, senior management, financial and legal services. Charities may withhold certain details where exemptions from disclosure apply

Sustainability

Tiers 1 and 2

• May choose to explain how they are responding to and managing environmental, governance, and social matters

Tier 3 only

• Must provide a summary of how the charity is responding to environmental, governance, and social matters
• Give details of environmental KPIs used to assess progress on climate risks
• Governance report on cyber and data security, and business ethics
• Social report on board diversity, employee engagement, and local community engagement

Charities may link to existing website information where reporting is current and ongoing.

How we can help

Our audit and accounting advisory service can help you prepare for your first report that will adhere to the new regulations, as well as advise on setting up your processes and training your key people.

Crowe Ireland provides expert advisory services to numerous charities and other not-for-profit organisations. Our team of experts can advise on the new Charities SORP requirements and how they affect your reporting, governance, reserves policies and impact narrative. To learn more about the new regulations from a compliance and financial reporting perspective and how we can help you, get in touch today.