At the time of writing, finance professionals working in the charity sector are awaiting two events.
The first of these is the new version of the SORP. Now, the phrase “at the time of writing” could be doing quite a bit of work here, because, if the timeline is adhered to and rumours of a “late October” release are right, then by the time you read this, the long wait for the new SORP will be over.
We know from the SORP-making body that in consultation responses, there was widespread support for the move to the three-tiered approach which was outlined in the draft version of the SORP, but there was no consensus on where the thresholds for the tiers should be set. Having said that, there was some support for them to set at the same level as the audit thresholds.
It will be interesting to see if these thresholds have changed in the final version – and indeed, if anything else changes.
Whatever it contains, this represents the biggest shake-up to the charity reporting landscape for many years. Although it does not come into effect until financial years beginning after 1 January 2026, all charities affected will be wise to start preparation early.
For those that do want to understand the implications of the new SORP, Charity Finance is holding a free webinar (kindly sponsored by Xledger) on 24 November. For more details and to register to attend, please click here.
The second event looming on the horizon is the next budget, which is taking place on 26 November.
The charity sector is still reeling from the financial impact of the increase in employers’ national insurance contributions, introduced at the last budget. It will be hoping for better news this time around.
If nothing else, the budget does give the opportunity for the government to act on the proposals (which were consulted on earlier this year) on the VAT treatment of goods donated by businesses. Currently, goods donated for the use of the charity or for the passing on to beneficiaries are treated differently in terms of VAT to goods donated for selling to raise funds. A new tax relief on eligible goods that charities give away free or use in the delivery of their services was proposed.
Time will tell what these two events have in store for the sector and both will be covered in our December issue.
Tristan Blythe is editor of Charity Finance
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