All charities have an obligation to file an annual report within 6 months of their balance date (end of the financial year).

Tier 1 and 2 charities must submit financial statements, and Tier 3 and 4 charities must submit a performance report to Charities Services which is in line with the reporting standards. All charities will also need to submit an annual return form.

The External Reporting Board have recently published new and simplified reporting standards which replace the existing standards for Tier 3 and 4 charities.

The new standards will need to be applied to accounting periods on or after 1 April 2024, however Tier 3 and 4 charities are able to apply to choose to adopt the new standards immediately.

Tier 3 reporting

The new Tier 3 Not-For-Profit (NFP) Standard supersedes the previous Public Benefit Entity Simple Format Report Reporting – Accrual (Not-For-Profit) Standard.

The most important changes in the new Tier 3 NFP standard are as follows:

  • The terminology related to service performance reporting is now more aligned with the Tier 2 Standard, and the terms ‘outcomes” and “outputs” have been removed. Further guidance on service performance reporting has been included in the new standard.
  • The introduction of a new model to recognise deferred revenue when there is a “documented expectation” rather than when there is a “use or return condition”. Note however any revenue that could be deferred under the “use or return condition” can also be deferred under the new “documented expectation” model.
  • Tier 3 entities will be able to revalue their property, plant and equipment, investment property, and publicly-traded financial investments without applying the Tier 2 Standard. Charities which have previously revalued their assets using a local council evaluation can still use these valuations in the Tier 3 (NFP) Standard.
  • There is an increase in the number of categories on the first page of the Statement of Financial Performance, and the option to disaggregate further on the Statement has been removed. This will make it easier for charities to classify their revenue and expense items. Charities will still be able to re-label the categories to use different terminology and/or provide further disaggregation in the notes to the performance report.
  • More information about restricted and discretionary reserves will need to be disclosed under the new Tier 3 (NFP) Standard, to increase transparency over charity resources and its future plans.

Tier 4 reporting

The new Tier 4 (NFP) Standard supersedes the previous Public Benefit Simple Format Reporting – Cash (Not-For-Profit) Standard.

The new Standard has been simplified to become more user-friendly and relevant for small charities. Charities will have a choice whether to use the simple template which contains only the minimum requirements for reporting, or the full template which contains optional information and additional disclosures.

There have been no changes to the reporting standards for Tier 1 and 2 charities.


Leading law firms committed to helping clients cost-effectively will have a range of fixed-price Initial Consultations to suit most people’s needs in quickly learning what their options are.  At Rainey Collins we have an experienced team who can answer your questions and put you on the right track.

Claire Tyler and Hanifa Kodirova

Charities Lawyer and Law Clerk