Trustees' annual report

Who must prepare one, and which size

The Charity Commission's guidance on preparing a trustees' annual report opens without qualification: "You need to write a trustees' annual report if your charity is registered in England or Wales." There is no income floor below which the report is optional, and the reporting requirements are the same in kind for registered charities of every type, from an unincorporated association to a charitable company. What gross income changes is the size of the report, the report to accompany the accounts being simple or full, and whether it has to be sent to the Charity Commission unasked.

There are two formats. A charity prepares "a simple report" if its "income is under £500,000 (and providing it doesn't have assets worth more than £3.26million)". It must prepare a full report if its "income is above £500,000 (or above £250,000 if its assets are worth more than £3.26 million)", or if "your charity is a company or CIO". A full report "needs to follow the guidelines set out by SORP", the Statement of Recommended Practice for charities preparing their accounts under FRS 102, which the Commission describes as "a framework for accounting and reporting, designed to help charity trustees meet their legal requirement for their accounts to give a true and fair view". Note the second trigger: a charitable incorporated organisation or a charitable company writes a full report whatever its income, and a great many small charities are CIOs.

Sending it is a separate question. "You only have to send a copy to the commission with your annual return if your income is more than £25,000. But you need to send the commission a copy if it asks for it." The annual return guidance sets the bands: a charity with income under £10,000 reports its income and spending; between £10,000 and £25,000 it completes the annual return; above £25,000 of gross income it submits the annual return together with the trustees' annual report, the accounts and the independent examiner's or auditor's report, and declares whether any serious incidents went unreported. Charitable incorporated organisations send the report and accounts with their annual return to the Charity Commission whatever their income, and above £25,000 add the examination and the serious-incident declaration like everyone else. "What type of accounts you need to prepare depends on the type of charity and its finances", and the annual return guidance walks through it band by band. Every charity that has to file must do so "within 10 months of the end of your financial year", and a late filing is shown as overdue on the public register, where funders and journalists look.

The thresholds are moving. The Commission's changes to charity accounting and reporting page sets out two sets of changes. A new Charities SORP, SORP 2026, the revised version of the SORP (FRS 102), applies to "reporting periods starting on or after 1 January 2026", with three tiers by income: up to £500,000, £500,000 to £15 million, and over £15 million. And for accounting years ending on or after 30 September 2026 the financial thresholds in England and Wales change: an independent examination is required above £40,000 of income rather than £25,000; a professionally qualified examiner above £500,000 rather than £250,000; the receipts and payments basis, the simpler alternative to preparing accruals accounts, is available to non-company charities below £500,000 rather than £250,000; and an audit is required above £1.5 million of income or £5 million of assets, rather than £1 million and £3.26 million. If your year end falls on or after 30 September 2026, read that page before deciding which examination and which format you need; the figures quoted from the report guidance above are the ones in force at the time of writing.

The simple report, line by line

The Commission's list for a charity under the full-report thresholds is six items, and its wording is worth keeping because it is the checklist an examiner will use:

• "your charity's name, registration number, address and trustee names"
• "its structure and details of how it is managed, including how it recruits trustees"
• "its activities and objectives in the year"
• "its achievements and performance, including reporting on its public benefit"
• "a financial review including any debts and details of your reserves policy (if applicable)"
• "details of any funds held as a custodian trustee"

"You can put more detail into your trustees' annual report if you want to." The Commission's own report template, published alongside the SORP, 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 the funds held as custodian trustee, if any, 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.

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 the law: "Whether you complete a simple or full trustees' annual report, by law you must report how you have carried out your charity's purposes for the public benefit." For a charity with income under £500,000, "you can choose how you report on this. But as a minimum you need to say":

• "what your charity's charitable purposes are"
• "what it has done during the year to carry out those purposes"
• "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 also need to": "explain your strategy for meeting its charitable purposes", "list any significant activities you undertook as part of this strategy", and "give details of what your charity achieved in carrying out these activities to meet its purposes". 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 fundraising approach; 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'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. 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 larger charity must 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?

Official guidance and your next step

The primary sources are the Charity Commission's Prepare a charity trustees' annual report, its trustees' annual report template with the SORP paragraph references, Prepare a charity annual return, and Changes to charity accounting and reporting, which carries the SORP 2026 dates and the thresholds for year ends from 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.