October 2025 not-for-profit & charities update
Recent updates from the Charity Commission
Statement of Recommended Practice (SORP) 2026: Final countdown
The Charities SORP 2026 is set to take effect from 1 January 2026, bringing the most significant overhaul to charity reporting in over a decade. The final version is expected to be published in Autumn 2025, following a 12-week consultation that closed in June.
Key changes include:
- A three-tier reporting structure based on income thresholds.
- A new five-step revenue recognition model.
- Lease accounting changes requiring most leases to appear on the balance sheet.
- Enhanced narrative reporting on impact, reserves, and sustainability.
Finance teams should assess their charity’s tier, review lease and income arrangements, and prepare for new disclosure requirements.
Further information can be found here.
Trustee Finance Toolkit: Key resources
The Charity Commission’s Trustee Finance Toolkit is a practical resource developed to help charity trustees confidently manage their organisation’s finances. The commission, added a financial health check module alongside the existing:
- Guides and tools to understand financial responsibilities.
- Advice on internal financial controls, reserves policies, and cybersecurity.
- A checklist of 15 key questions trustees should ask about their charity’s financial health.
- Support for collaborative working and improving financial sustainability.
It’s designed to empower trustees, especially those without a finance background, to make informed decisions and safeguard their charity’s assets.
Visit the toolkit here.
Charity Sector Risk Assessment 2025
The Charity Commission’s first annual Charity Sector Risk Assessment highlights growing risks to financial resilience, with 22.5% of charities reporting operating deficits in 2023. Rising costs and demand are both driving increased reliance on reserves.
The report also flags risks to public benefit, including misuse of charity structures for personal gain, such as false Gift Aid claims and unauthorised payments. Though rare, these cases can damage public trust.
Other risks include poor governance, safeguarding failures, fraud, cyber threats, and geopolitical instability. Trustees are urged to strengthen financial planning, monitor early warning signs, and use updated guidance to mitigate risks.
Get help for your inactive or ineffective charity
The Revitalising Trusts Programme helps charities in England and Wales that are inactive (no financial activity or annual returns for 5 years) or ineffective (spending less than 30% of income over 5 years). Common issues include difficulty finding trustees, identifying beneficiaries, or accessing funds. The programme offers support to transfer assets, wind up, or revise charitable purposes, and trustees may also receive help accessing bank-held funds. If contacted, charities should respond promptly; those not contacted but struggling can reach out directly for assistance.
More information can be found here.
Whistleblowing reports summary
The Charity Commission has released its annual review of whistleblowing reports. This provides useful insights into the common themes of issues reported and can help your charity to strengthen governance by ensuring these common areas are reviewed.
In total, 546 whistleblowing disclosures were received between April 2024 and March 2025. This is the second-highest total in the past decade, though slightly down from 561 the previous year. 54% came from current or former employees, with the remaining from non-employees (e.g. volunteers, trustees). The top issues reported were:
- Governance failures – 303 cases (up from 277)
- Financial harms – 96 cases (down from 128)
- Safeguarding concerns – 84 cases (down from 104)
Other issues included:
- Disputes (32)
- Conflicts of interest (25)
- Reputational damage (3)
- Public benefit concerns (2)
- GDPR breaches (1)
Scottish Charity Regulator (OSCR) updates
Sector overview report
OSCR’s latest Sector Overview Report offers a snapshot of Scotland’s charity sector from July to September 2025. It reveals that Scottish charities have a combined annual income of £18.22 billion, yet 49% earn less than £25,000 and 27% less than £5,000. Notably, 66% have no paid staff, relying entirely on volunteers, though 27% report having none. Most operate locally, while 11% work internationally. The report is interactive, allowing users to filter data by income, activity, and geography.
New automatic disqualification rules now in place
New rules from OSCR extend automatic disqualification to include senior managers, not just trustees. Individuals convicted of terrorism offences, listed on the sex offenders register, or previously excluded (e.g. bankrupts, disqualified directors) are now barred from key charity roles. Charities must review governance and recruitment processes to ensure compliance.
OSCR has issued a revised trustee declaration form, recommended for onboarding both trustees and senior staff. Disqualified individuals can apply for a waiver in specific cases. These changes aim to uphold public trust and ensure high standards of integrity. More information can be found here.
Fundraising developments to consider
Update on the new Code of Fundraising Practice
Following nearly three years of consultation, next month the new Code of Fundraising Practice comes into force, marking a shift to a more principles-based approach. The code aims to simplify guidance, support innovation, and clarify expectations for fundraisers. Over 1,500 people attended launch events, with 90% finding them useful and 80% expressing confidence in the new code.
In response to sector feedback, three minor wording refinements have been made:
- ID badges: Now require either the charity’s or third-party employer’s contact details, not both.
- Processing fees: Clarified to exclude standard transaction costs like card fees.
- Will-writing partners: Updated to require offering two providers, not formal partnerships.
A final version of the code will be published in November, with changes marked in current PDFs. Full updates and useful resources can be found here.
Zero tip rules on fundraising platforms
From 1 November 2025, online fundraising platforms like JustGiving must offer a clear and easy zero-tip option for donors, as part of the new Code of Fundraising Practice. This change makes previous guidance enforceable and aims to improve transparency and donor trust.
The move follows criticism of JustGiving’s default 17% tip and concerns over high fees and retained Gift Aid. The Fundraising Regulator is working with platforms to ensure compliance and fair fundraising practices. More information can be found here.
Companies House
Reminder: Directors ID verification
From 18 November 2025, identity verification becomes a legal requirement for directors, persons with significant control (PSCs), and others involved in company filings. Verification can be done via GOV.UK One Login or through an Authorised Corporate Service Provider (ACSP).
Once verified, individuals receive a Companies House personal code, which must be used for filings and appointments. Failure to verify may result in fines, disqualification, or inability to act in company roles. The aim is to improve transparency, reduce fraud, and ensure accurate records.
Useful guidance can be found at:
Changes to company registers
From 18 November 2025, UK companies no longer need to keep statutory registers of directors, secretaries, or PSCs. Instead, this information must be kept up to date directly with Companies House. The requirement to record a director’s occupation is also removed, however, companies must still maintain a register of shareholders, stored at their registered office or inspection location and made available for public viewing. These changes aim to simplify compliance and improve transparency.
More information is available here.
Other points of note
Cyber Action Toolkit
Cyber threats are on the rise, and small organisations like charities are increasingly at risk. The UK Government’s new and free Cyber Action Toolkit is designed to help you safeguard your charity’s finances, data, and reputation.
Tailored for small businesses and not-for-profits, the toolkit offers practical, bite-sized actions selected by cyber security experts. It’s easy to use, even for those with little technical knowledge, and starts with simple steps that deliver maximum impact. You can track your progress, mark tasks as complete, and build layers of protection against common threats like phishing, ransomware, and data breaches.
More information and the tool kit can be found here.
Charity Fraud Awareness Week 2025
Charity Fraud Awareness Week runs from 8–12 December 2025, aiming to tackle fraud and cybercrime in the not-for-profit sector. The campaign encourages organisations to raise awareness by hosting events, running fraud sessions, sharing resources, and joining webinars.
The initiative highlights that all charities are vulnerable to fraud, especially during global crises, and must take steps to protect finances, people, and data. It’s targeted at trustees, staff, volunteers, advisors, regulators, and anyone committed to safeguarding the sector.
Some great resources can be found here.
Trustees’ Week
Trustees’ Week 2025 runs from 3–7 November 2025 and celebrates the dedication of nearly one million charity trustees across the UK. It’s a chance to recognise their vital role in helping charities thrive, while inspiring others to consider trusteeship. The week features a wide range of events, training, and resources (online and in person) covering topics like governance, board diversity, and strategic planning.
Whether you're an experienced trustee or exploring the role for the first time, Trustees’ Week offers opportunities to connect, learn, and grow. Visit trusteesweek.org for full details and event listings.
Reform to marriage law – an opportunity for income diversification?
The UK is set to reform marriage law, allowing couples to marry in more locations, including beaches and heritage sites, and enabling legal ceremonies for non-religious groups like Humanists. The focus will shift from buildings to officiants, giving couples more flexibility. Religious weddings (e.g. Sikh, Muslim, Hindu) will also be simplified.
The changes are expected to boost weddings by 3%, add £535 million to the economy, and create 12,000 jobs. This will also provide an opportunity for income diversification for charities.
Charity retailers report
According to the charity retailers report, charity retailers are facing reduced profits due to the changes to National Insurance contributions (NICs) introduced in April 2025. The rate rose from 13.8% to 15%, and the threshold dropped to £5,000, bringing more part-time staff into scope meaning the sector could face £20 million in extra costs annually.
Retailers like The Children’s Society and All Aboard Shops report up to 75% profit decline, worsened by rising rents and utility bills. Larger charities, including Age UK and the Salvation Army, are reassessing staffing and operations. These pressures risk undermining the ability of charity shops to support their causes.
Reminder: Failure to prevent fraud offence (Effective 1 September 2025)
Large incorporated charities meeting two of the following criteria must implement reasonable fraud prevention procedures or risk criminal liability:
- £36m turnover
- £18m assets
- 250+ employees
This includes risks from employees, volunteers, and third-party partners.
Tax
Gift Aid Awareness Day
Gift Aid Awareness Day 2025 was celebrated on Thursday 9 October 2025, encouraging charities to promote the #TickTheBox message. Gift Aid enables charities to claim an extra 25p for every £1 donated, yet £560 million goes unclaimed annually. With 67,000 charities claiming Gift Aid, the goal is to help more organisations benefit.
Read our article on gift aid here. We are here to support you with understanding the rules surrounding Gift Aid, training your team and auditing Gift Aid processes and returns to ensure you are claiming correctly and maximising your return.
We are here to help
If you need any support or advice in relation to the latest sector guidance or have any general questions, please get in touch with our charity sector team.
