Trustees' annual report

Who must prepare one, and which size

The Charity Commission's Prepare a trustees' annual report for your charity states it without qualification: "You must write a trustees' annual report if your charity is registered in England or Wales." There is no income below which the report is optional. What varies is its size, and the size follows the accounts. A charity that prepares receipts and payments accounts, a record of cash in and out with a statement of what the charity owns and owes, can prepare a simple report. A charity that prepares accruals accounts, because it has to or because its trustees choose to, must prepare a report that complies with the Charities Statement of Recommended Practice (SORP), the framework for charity accounting and reporting on the accruals basis: SORP 2019 for financial years starting on or before 31 December 2025, and SORP 2026 for financial years starting on or after 1 January 2026. This guide calls that the full report, and under SORP 2026 how much it must say depends on which SORP tier the charity is in. A charitable company also prepares a directors' report, which can be combined with the trustees' annual report.

Which accounts a charity prepares depends on its legal form and its income, and the Commission's Charity accounts guidance, updated on 16 September 2026, has separate rules for trusts and unincorporated associations, charitable companies and charitable incorporated organisations (CIOs). Every charitable company prepares accruals accounts, so it writes a full report whatever its income. A trust, an unincorporated association or a CIO may prepare receipts and payments accounts, and so write the simple report, if its gross income is £250,000 or less, or £500,000 or less for financial years ending on or after 30 September 2026, unless its governing document requires accruals accounts. Its trustees may choose accruals accounts anyway, and a funder may require them; above the threshold, accruals accounts and a full report are compulsory. The Commission's own example is a CIO that had to prepare accruals accounts on £358,000 of income for the year ending 31 January 2026 and, expecting £437,000 for the year ending 31 January 2027, can now choose either.

Sending the report is a separate question. The report guidance says a copy must go to the Commission if the charity is a CIO, whatever its income; if it is a trust, unincorporated association or company with income over £25,000; or if the Commission asks for it. The annual return guidance and the Commission's threshold table set the bands. A charity other than a CIO with income of £10,000 or less reports only its income and spending; above £10,000 it completes the annual return; above £25,000 it also uploads the trustees' annual report and the accounts, and declares that there are no serious incidents it has not reported. A CIO completes the annual return and uploads its report and accounts at any income, and adds the serious-incident declaration above £25,000. In both cases the independent examiner's or auditor's report goes with the accounts only where the accounts must be examined or audited. Every charity that has to file must do so "within 10 months of the end of your financial year", and the public register, where funders and journalists look, marks documents still outstanding as overdue and records how many days late any late filing was.

The examination and audit thresholds move for financial years ending on or after 30 September 2026. The Commission's threshold changes at a glance, dated 16 September 2026, sets the old and new figures side by side, and every threshold in this section is taken from it. For those years the accounts need no independent examination or audit at £40,000 of income or less, rather than £25,000, unless the governing document or a funding agreement requires one; the examiner must be professionally qualified above £500,000 rather than £250,000; and an audit is required above £1.5 million of income, or above £500,000 of income with assets over £5 million, rather than above £1 million, or above £250,000 of income with assets over £3.26 million. The £10,000 and £25,000 filing lines do not change. Which figures apply turns on the date the financial year ends, not the date the report is written, so check the table against the year end before deciding which accounts, which examination and which report the charity needs.

The simple report, line by line

For a charity preparing receipts and payments accounts, the Commission's guidance sets out what the report must contain under six headings, and they are the checklist an examiner will use:

• the charity's registered name and any other names it uses, its registration number, the address of its main or head office, and the names of its trustees
• what its governing document is, and the name of any person or organisation entitled to appoint trustees
• its purposes, its main activities in the year that helped it carry them out for the public benefit, and a statement as to whether the trustees have had regard to the Commission's public benefit guidance
• a summary of its main achievements during the year
• a financial review: any reserves policy, or a statement that there is none and why; the amount of reserves and why they are held; and, for any fund in deficit, how the deficit occurred and the steps being taken to remove it
• details of any funds held as a holding trustee on behalf of others

"You can put more detail into your trustees' annual report if you want to." The Commission's own report template, published in 2016 for the SORP (FRS 102) that SORP 2026 replaces for financial years starting on or after 1 January 2026, shows what more detail looks like and cross-refers every box to a SORP paragraph, so it doubles as a map of the full report. Under objectives and activities it asks for a summary of the charity's purposes "as set out in its governing document", a summary of the main activities "in relation to those purposes for the public benefit", and a "Statement confirming whether the trustees have had regard to the guidance issued by the Charity Commission on public benefit"; the optional lines are the policy on grant making, on social investment, and "Contribution made by volunteers". Under achievements and performance, a summary of the main achievements "identifying the difference the charity's work has made to the circumstances of its beneficiaries and any wider benefits to society", with optional achievements against objectives, fundraising against objectives and investment performance. Under financial review, the review of the financial position at the end of the period, the reserves policy "stating why they are held", the "Amount of reserves held", the "Reasons for holding zero reserves" where that applies, "Details of fund materially in deficit" and an "Explanation of any uncertainties about the charity continuing as a going concern"; optionally the principal sources of funds, the investment policy and "A description of the principal risks facing the charity". Under structure, governance and management, the type of governing document, how the charity is constituted, and the trustee selection methods "including details of any constitutional provisions e.g. election to post or name of any person or body entitled to appoint one or more trustees", with optional lines on trustee induction and training, the organisational structure and any wider network, and relationships with related parties.

The reference and administrative details page is where most small-charity reports go wrong, and it is the easiest to get right if the register is kept during the year: every trustee who served, their office if any, "Dates acted if not for whole year", and the "Name of person (or body) entitled to appoint trustee (if any)"; for a corporate trustee, the directors at the date the report was approved; the names of any trustees holding title to the charity's property; the optional lines are the names and addresses of advisers, the chief executive or senior staff, and the reason for any non-disclosure of key personnel details. Then any funds held as a holding trustee (the template's custodian trustee), with the arrangements "for safe custody and segregation of such assets". The report ends with the trustees' approval and a signature on their behalf, and the date, which needs to be a date the minutes can show. Because the Commission publishes the reports it receives on its register, where "they are accessible to everyone", its guidance says "You must comply with UK GDPR rules on publishing personal information" and asks trustees to check "that any personal data you include in your accounts and annual report is necessary, fully justified and not excessive".

The full report, and the public benefit statement every charity must make

A full trustees' annual report contains everything the simple report contains, in the SORP's structure and with its additional disclosures, and the public benefit section is where the difference is most visible. The Commission is direct about it: "Your report must include information on how your charity has carried out your charity's purposes for the public benefit." For a charity with gross annual income of £500,000 or less, "you can choose how you report on this. But as a minimum you need to say":

• "what your charity's charitable purposes are"
• "what your charity has done during the year to carry out those purposes for the public benefit"
• "that you have taken the Commission's public benefit guidance into account when making any decision it is relevant to"

For a charity with income over £500,000, "you will need to provide extra information. The level of detail in your report will depend on what SORP tier your charity is in." The third bullet in the minimum list is the one to notice. It is not a boilerplate sentence about having read the guidance; it is a statement that the guidance was taken into account "when making any decision it is relevant to", which means the trustees need to be able to point to those decisions. Section 04 returns to this.

Beyond public benefit, the SORP asks a full report for the narrative a simple report may leave out: the strategy and the significant activities behind it; the reserves policy with the amount held, why it is held and how it compares with the policy; the principal risks and uncertainties and how they are managed; the induction and training of trustees; the organisational structure, related parties and any wider network; and, for the larger tiers under SORP 2026, more. The Commission lists the SORP 2026 requirements under nine headings: objectives and activities; achievements and performance; financial review; plans for future periods; structure, governance and management; reference and administrative details; sustainability; exemptions from disclosure; and funds held as a holding trustee. Where the accounts must be audited, the report must also include a fundraising statement: the approach taken, whether a professional fundraiser or commercial participator was involved, whether the charity is registered with the Fundraising Regulator and commits to the Code of Fundraising Practice, the complaints received, and what the charity has done to protect vulnerable people and other members of the public. The Commission's template marks the paragraphs. The practical rule is that a full report should be written from the SORP's headings in order, so that an examiner or auditor can tick each one, and every figure in it should be the figure in the accounts it accompanies.

One structural point that surprises new treasurers: the report accompanies the accounts but is not part of them. The accounts are prepared under the Charities Act 2011 and the regulations made under it, on either the receipts and payments basis or the accruals basis, an income and expenditure account with a balance sheet, depending on income and legal form; the report is the trustees' narrative, approved by them and signed on their behalf. The independent examiner or auditor reports on the accounts, and checks that the report is consistent with them. So a report that describes a surplus the accounts do not show, or a reserves figure that cannot be found in the balance sheet, is the kind of inconsistency that an examiner is there to catch and that the Commission's accounts monitoring reviews look for.

The records the report rests on

Everything in sections 02 and 03 is a claim, and the claims have a statutory foundation before they have a narrative one. For every charity except a charitable company, which keeps its accounting records under section 386 of the Companies Act 2006 in almost the same words, section 130 of the Charities Act 2011 requires the trustees to "ensure that accounting records are kept in respect of the charity which are sufficient to show and explain all the charity's transactions", such as to "disclose at any time, with reasonable accuracy, the financial position of the charity at that time". The records "must in particular contain" "entries showing from day to day all sums of money received and expended by the charity, and the matters in respect of which the receipt and expenditure takes place" and "a record of the assets and liabilities of the charity". Section 131 then requires those records to be preserved "for at least 6 years from the end of the financial year of the charity in which they are made", and if the charity ceases to exist within that period the obligation "must continue to be discharged by the last charity trustees of the charity, unless the Commission consents in writing" to their disposal. "At any time" is the phrase to notice: the duty is not to reconstruct the position at the year end, but to be able to state it in March.

The accounting records answer the financial review. The rest of the report is answered by governance records that no statute lists in one place but that every line of the template assumes:

1. The governing document and the register of trustees, with appointment and retirement dates, offices held, who appointed each trustee and under which clause. This is the reference and administrative page written for you, and it is also what the annual return asks for.
2. The minutes. Every decision the report describes as one "the trustees" made: adopting or reviewing the reserves policy, approving a grant programme, agreeing the strategy, accepting a risk, approving the report itself on a stated date. The minute-taking guide on this site sets out what a minute needs to contain to carry that weight.
3. The public benefit decisions. Because the statement is that the guidance was taken into account "when making any decision it is relevant to", the minutes of those decisions should say so: a change to who the charity serves, a fee, a closure, a new activity. A single line in the minute is enough; its absence is what leaves the statement unsupported.
4. The reserves record. The policy as adopted, the calculation behind the target, and the figure at the year end reconciled to the accounts, with the reasons if reserves are nil or a fund is in deficit.
5. The risk register, reviewed on a date the minutes show, if the report is going to describe the principal risks and the risk management processes behind them.
6. The conflicts of interest register and related-party transactions, since the full report discloses relationships with related parties and the accounts disclose the transactions.
7. The insurance schedule, because trustee indemnity insurance paid for by the charity is disclosed in the accounts, and because the risk narrative usually rests on what is insured and what is not.
8. The serious incident log. The annual return asks the trustees to declare that no serious incident went unreported; the log is the evidence for the declaration and for the risk narrative.
9. Fundraising and volunteer records, for the fundraising statement a charity whose accounts must be audited has to make and the "Contribution made by volunteers" line a smaller one may choose to make.
10. The achievements file. Not a statutory record but the one that makes the difference between a report that says "we ran a youth club" and one that says what changed for whom. Attendance, outcomes, feedback and case examples gathered as they happen, with consent for anything identifying.

The pattern across the list is that each record is easy to keep as the year goes and hard to assemble in the last month before filing. The trustees' annual report is, in the end, a summary of those records with a narrative over them. Where a record does not exist, the honest report says less, and the Commission's guidance allows a report to say less. What it does not allow is a sentence with nothing behind it.

Writing it as a year, not as a fortnight

A charity that starts the report after the year end is starting late, and the ten-month window makes that feel safe until it is not. A simpler rhythm, which needs no extra meetings:

• At the first meeting of the financial year, confirm the report's size and the examination the charity will need, checking the thresholds against the year-end date, since the changes from 30 September 2026 depend on it. Minute the reserves policy review and the risk register review.
• At every meeting, minute achievements against the objectives set, so that the achievements section is written by the minutes rather than from memory. Where the public benefit guidance is relevant to a decision, say so in the minute.
• Keep the trustee register current as people join and leave, with dates, and keep the achievements file open all year.
• At the year end, close the accounting records, draft the financial review from the accounts rather than before them, and give the examiner the draft report with the accounts so that consistency is checked once.
• Approve the report at a minuted meeting, sign it on the trustees' behalf with the date, and file it with the annual return and accounts inside ten months. Then read it as a funder and a beneficiary would, because both can.

Two things the report is not. It is not marketing: the Commission publishes it precisely because it is the trustees' account, and a report that reads like an appeal invites the question of what it is not saying. And it is not the treasurer's job alone: the Charities Act places the accounting-records duty on "the charity trustees", and the report is approved by all of them. A trustee who has not read the report they are approving is approving statements they cannot support.

The decisions in the report were made in messages

Take a sentence that appears in some form in most reports: "During the year the trustees agreed to draw £6,000 from unrestricted reserves to keep the drop-in open." It is a governance decision with a financial consequence, it belongs in the financial review, and the minutes should show it. In a small charity it was very often made like this: the chair messages the trustees' group chat on a Sunday evening, four of the six reply within the hour, the treasurer says "agreed, I'll move it Monday", and the next formal meeting is three weeks later and minutes the payment as already made. The decision itself, the one the report attributes to "the trustees", exists only on six personal phones.

The same is true of the grant the chair approved by text because the deadline was that afternoon, the voice note in which the treasurer warned that a restricted fund was going into deficit, the thread in which two trustees discussed a conflict of interest before the meeting that recorded none. Section 130 of the Charities Act asks for records that show the "matters in respect of which" money was spent; the SORP asks the full report for the trustees' policies on reserves, risk and related parties; the public benefit statement rests on decisions the trustees can point to. A consumer messaging app with end-to-end encryption is designed so that only the handsets in the conversation hold it, which is why the charity, as an organisation, cannot produce it for the examiner, for the Commission, or for the new trustee who is trying to understand why last year's report says what it says.

None of this argues for slower decisions. A charity that can agree something on a Sunday evening and act on Monday is a charity that works. It is a records question about where the agreeing happens, and it belongs to the chair and the whole board rather than to whoever set up the group. The answers are the same two as in every guide on this site: a discipline of minuting every message-made decision at the next meeting, in the words used and with the date, which works until the busiest month of the year; or giving the board a channel the charity itself controls, where everyone in it is told it is on the record, the record is written as the message is sent, and the thread that made the decision can be produced with the minutes that confirmed it. That is what ComplyChat is designed for, and it is not an accounts package, a minute book or a substitute for the meeting.

The question for the board is a concrete one: of the decisions described in last year's trustees' annual report, which can you show from the minutes, and which only from a phone?

Questions people ask

Are trustees' annual reports mandatory?

Yes, for every registered charity in England and Wales: the Commission says "You must write a trustees' annual report if your charity is registered in England or Wales." Sending it to the Commission is a separate requirement: section 163 of the Charities Act 2011 requires the trustees to send a copy within 10 months of the year end where gross income exceeds £25,000, and a CIO must send it whatever its income.

What happens if a charity does not file its annual report?

If a report the law requires to be sent to the Commission is late, each person who was a trustee immediately before the deadline is guilty of an offence under section 173 of the Charities Act 2011, though it is a defence to prove they took all reasonable steps to file in time. The essential trustee (CC3) adds that the Commission regards a failure to submit accounts and accompanying documents as mismanagement or misconduct, and the register shows the filing as overdue.

What does a good trustees' annual report look like?

A good trustees' annual report explains in plain language what the charity is for, what it achieved and for whom, where its money came from and how it was spent, and what it holds in reserve, with every figure matching the accounts. The Commission says the report "helps people understand what your charity does, particularly your charity's beneficiaries and potential funders", so write it for them rather than for the examiner alone.

Where can I see an example of a trustees' annual report?

The Charity Commission publishes the annual reports and accounts it receives on its register of charities, where "they are accessible to everyone", so any charity's recent filings can be read there. Its trustees' annual report template, linked below, was written for the previous SORP, so check it against the nine SORP 2026 headings; reading two or three reports from charities of a similar size and purpose is the quickest way to see the standard.

Official guidance and your next step

The primary sources are the Charity Commission's Prepare a trustees' annual report for your charity, its trustees' annual report template with the SORP paragraph references, Prepare a charity annual return, and Charity accounts, which sets out the accounts rules for each legal form and carries the threshold table for financial years ending before, and on or after, 30 September 2026. The statutory duties are in sections 130 and 131 of the Charities Act 2011, Part 8, and the SORP itself is published at charitysorp.org. Scottish charities report to OSCR and Northern Irish charities to the Charity Commission for Northern Ireland, under their own rules.

This guide is a practical starting point for trustees of charities registered in England and Wales, not advice about any particular charity's accounts. Your independent examiner or auditor, and the Commission's own guidance for your income band and legal form, come first.

Then do one thing: put the trustee register and the reserves policy on the agenda of the next meeting, check both against what last year's report said, and minute the result. Two of the six items in the simple report will then already be true for this year, on a date you can show.