Academies Accounts Direction 2025/26: understanding the changes
The Academies Accounts Direction 2025 to 2026 , applies to academy trusts for the period ending 31 August 2026.
While there are minimal changes from previous years, it’s still essential for trusts to understand the latest compliance requirements when filing accounts.
What has changed
The AAD 2025/26 changes are mostly around disclosures to provide clarification to the reader of the accounts, as opposed to fundamental policy shifts.
This emphasises transparency, governance and accountability, as well as providing alignment to the wider public sector, specifically the future impact of the implementation of Charity SORP 2026.
Trustees’ report
Trade union facility time
This no longer needs to be reported in the statutory accounts. It will still need to be reported elsewhere, such as on the trust’s website and relevant government returns.
Energy and carbon reporting
Updated guidelines increase the expectation on trusts to provide relevant disclosures and narrative on energy efficiency and climate action. There is greater clarity too on the thresholds for carbon reporting. Total annual energy usage by the trust must exceed 40,000 kWh; and it must reach two of the three following criteria for two consecutive years to be in scope:
- More than £36m turnover
- More than £18m assets
- More than 250 employees
Staff costs
Three small changes impact the disclosures within the staff costs note:
- Payments in lieu of notice must now be included within restructuring costs
- A full-time equivalent (FTE) banding is now required for staff earning more than £60k
- The definition of ‘key management personnel’ definition now includes individuals paid outside the payroll (e.g. consultants, agency staff)
Regularity and compliance
A consistently important area in the AAD, AAD 2025/26 emphasises behaviour, conduct in public office and public expectations.
There is now expected to be a higher evidential threshold in place when considering internal controls and documentation with specific reference to regularity statements.
How BKL can help
Our specialist education sector team have more than 25 years’ experience of providing advice to over 100 schools and academies, including single academy trusts and multi academy trusts across the UK.
We can help your trust to understand and meet the AAD requirements, and to fully prepare for your changing requirements under the revised Charities SORP and FRS 102[DG1] accounting standards from 2026/27 onwards.
For a chat about how we can help, get in touch with Carly Pinkus using the form below.
Academy Trust Updates webinar
On Thursday 17 September, our senior academies and schools experts will take you through the ATH 2026 changes, explain your reporting requirements and answer your questions.
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Frequently asked questions: Academies Accounts Direction 2025/26
What is the Academies Accounts Direction (AAD) and why does it matter?
The Academies Accounts Direction (AAD) sets out how academy trusts must prepare their annual financial statements and related disclosures. It provides the framework for financial reporting, governance reporting and compliance requirements.
Following the AAD is essential because academy trusts are expected to demonstrate transparency, accountability and proper stewardship of public funds. The 2025/26 update contains relatively limited changes, but it reinforces expectations around governance, reporting quality and evidence of compliance.
Do academy trusts need to take action if the 2025/26 changes are relatively minor?
Yes. Even where changes are not fundamentally altering accounting policies, trusts should review their reporting processes and disclosure requirements before year-end.
Several amendments affect information presented in the accounts, including staff cost disclosures, key management personnel reporting and energy-related reporting. Addressing these requirements early can help avoid year-end reporting issues and reduce the risk of omissions during audit and accounts preparation.
What are the new staff cost disclosure requirements for academy trusts?
The 2025/26 AAD introduces three notable disclosure changes relating to staff costs.
Payments in lieu of notice must now be included within restructuring costs disclosures. Trusts must also provide full-time equivalent (FTE) banding information for employees earning more than £60,000. In addition, the definition of key management personnel has been expanded to include certain individuals who are not paid through the payroll, such as consultants or agency staff where they perform key management functions.
Who counts as key management personnel under the updated guidance?
Key management personnel may now include individuals paid outside a trust’s payroll arrangements if they have significant responsibility for directing and controlling the trust’s activities.
This means trusts should not automatically exclude consultants, interim leaders, contracted executives or agency staff from consideration. Academy trusts should carefully assess roles and responsibilities to ensure disclosures accurately reflect everyone who meets the expanded definition.
Will academy trusts still need to report trade union facility time?
Yes, but not within the statutory accounts.
The requirement to include trade union facility time disclosures in academy trust financial statements has been removed. However, trusts may still need to provide this information through other channels, including government returns and information published on their websites. Trusts should therefore ensure reporting processes remain in place even though the disclosure is no longer part of the annual accounts.
Which academy trusts need to report on energy use and carbon emissions?
Not every academy trust falls within the reporting requirements.
A trust must have annual energy consumption exceeding 40,000 kWh and meet at least two of the following criteria for two consecutive years: turnover above £36 million, assets above £18 million, or more than 250 employees. Trusts that may be approaching these thresholds should monitor their position carefully and prepare reporting processes in advance.
Why is there a greater focus on regularity, compliance and internal controls?
The updated AAD places increased emphasis on behaviour, conduct in public office and the expectations placed on organisations that receive public funding.
In practice, this means academy trusts should be able to demonstrate stronger evidence supporting their regularity and compliance statements. Robust documentation, clear approval processes, well-maintained policies and effective internal controls are likely to become increasingly important in demonstrating that decisions have been made appropriately.
What happens if an academy trust cannot fully evidence its compliance processes?
Insufficient evidence can create challenges when preparing regularity statements and responding to audit scrutiny.
Even where a trust has complied with relevant requirements, weak documentation may make it harder to demonstrate compliance. Trustees and senior leaders should ensure important decisions, approvals, controls and governance processes are properly recorded throughout the year rather than attempting to recreate evidence retrospectively.
How are the upcoming Charity SORP 2026 changes, and recent FRS 102 changes, likely to affect academy trusts?
The most significant reporting changes may still be ahead.
The AAD highlights the forthcoming Charity SORP 2026 and revisions to FRS 102, which are expected to bring broader changes to financial reporting in future years. Academy trusts should begin monitoring these developments now so they have sufficient time to understand potential impacts on disclosures, accounting policies, governance reporting and financial planning.
Should academy trusts start preparing for future reporting changes now?
Yes. Early preparation is likely to make transition easier and reduce compliance risks.
Trustees, finance teams and accounting officers should use the 2025/26 reporting cycle as an opportunity to review governance arrangements, financial reporting processes and data collection procedures. Seeking advice early can help trusts understand upcoming requirements, identify gaps and prepare effectively for future changes arising from the Charity SORP 2026 and FRS 102 revisions.
