CFG's Policy Officer, Isaac Bristol, provides an update on all the various happenings in the policy world, with a new SORP, changes to audit thresholds and an autumn budget on the horizon.
As the Autumn Budget’s tax-heavy shadow inches closer, CFG’s policy team has been working across a number of issues, tied together by one theme: an ounce of prevention is worth a pound of cure.
Our attention first turns to Westminster. The headline piece of news in charity finance was the announcement of the new Charities SORP, which will introduce a range of changes, including three new tiers aimed to ensure reporting is more proportionate to a charity’s size.
You can see more details about the SORP in our article on the topic, which you can read here. In keeping with the theme of prevention, we are also hosting free webinars on the changes introduced by the new SORP and how they’ll impact your charity’s financial reporting. You can find the schedule here.
In related news, and announced on the same day, the government released details of the new audit thresholds for the charity sector. The threshold for a full audit of accounts has been raised from £1 million to £1.5 million, bringing it roughly in line with inflation over the last decade, a welcome change that CFG has long supported.
And since then, we have also received more welcome news from Scotland, with OSCR and the Scottish government announcing the raising of their audit thresholds from £500,000 to £1 million from 1 January 2026. You can read more about that here.
As part of the Civil Society Group (CSG), and in the lead-up to the Autumn Budget, we submitted our recommendations to government. The submission set out key reforms, some of which build on areas we’ve previously called for action on, namely improved local government collaboration and funding, and reforms to charity tax and philanthropy.
We also introduced new proposals focused on reducing the digital deficit and supporting safe, proportionate AI adoption within the sector. These measures aim to strengthen charities in an increasingly challenging financial environment.
On the topic of finance, The Finance Bill 25/26 has arrived with a few unintended consequences. To prevent (tax-based) ailments before they spread, we sent a joint letter with other charity infrastructure bodies outlining our main concerns.
These focus on charity investments, donations, and legacies, areas where fraud prevention is essential but where policy must not become prohibitive or discouraging to charitable giving. We expect further engagement with government on this topic moving forward.
We have more technical unintended consequences to address within the Digital Markets, Competition and Consumers Act (DMCCA). The DMCCA has implications that could affect membership charity's ability to collect Gift Aid. We are in ongoing correspondence with government on this issue and have included a note on it in the CSG Budget Submission.
Heading across the Irish Sea, we recently responded to a consultation on the Northern Ireland Charity Act 2008. The consultation covered several areas, most notably the proposal to commence “Section 167,” which would require UK charities based outside Northern Ireland to meet new regulatory and registration standards. While still described as a light-touch measure, it would nonetheless impose additional administrative burdens for little benefit, a point we made clear in our submission. We are now awaiting the official consultation response.
Lastly, I wanted to signpost to an important survey. One of the potential changes being discussed in the budget is a £2,000 cap on salary sacrifice. We are asking charities to answer a short survey to better understand how this change could impact the sector, to respond please click here.
As you can see, prevention defines much of our policy work at the moment. The busiest period is yet to come, and with the Autumn Budget around the corner, you’ll be hearing, reading and seeing plenty more from CFG in the coming months.