Article

Charity sector development report 2026

By:

Harriet Taylor-Raine,

Stephen Dean,

Paul Rao

20 Apr 20261 min read

In our 2026 charity sector development report, we consider the current risks and developments facing the sector. Financial resilience continues to be a hot topic, along with growing societal pressures, and the changing reporting environment. Charities continue to face rising demands to do more with less, while funding from grants and contracts increasingly falls short of covering costs.

Contents

Our 2026 charity development report considers sector risks, financial reporting and regulatory updates, and includes commentary on tax, VAT and employment services.

Our 2026 report reviews these current risks along with developing issues such as system implementation failures, safeguarding, and how society responses to news events impacts specific charities. We offer reminders on the revisions to the Companies Act, and audit and independent examination thresholds and what this means for charities.

This year our VAT team includes their views on recent changes and the outcomes of cases affecting charities, and we review the effects of the changes to pension salary sacrifice schemes.

We summarize the key changes in the new charity SORP, applicable to accounting periods beginning on or after 1 January 2026. The main changes are a new 5-step model for revenue recognition, and the introduction of all leases onto the balance sheet (with exceptions for short term and low value leases).

I hope your organisation finds our 2026 report insightful. If you have any feedback or suggestions for future editions of our annual report, please contact us.