A. BASIS OF PREPARATION
The accounts (financial statements) have been prepared in accordance with the Charities SORP 2019 FRS 102, applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) and the Companies Act 2006 and the Charities and Trustee Investment (Scotland) Act 2005 and the Charities Accounts (Scotland) Regulations 2006 (as amended 2014). The subsidiaries consolidated into these financial statements have produced their financial statements to 31 December 2025.
B. GOING CONCERN
The Trustees consider that there are no material uncertainties about the charitable company’s ability to continue as a going concern. Accordingly, they continue to adopt the going concern basis in preparing the financial statements as outlined in the Financial Review. Assessments for going concern include long-term cash flow forecasts and scenario planning.
Our pipeline for 2026 projects is already secured. It continues to be very healthy, with an influx of £84 million of cash into our bank accounts in Quarter 4 2025 for 2026, enabling us to plan for the coming year with more certainty.
Scenario planning has been undertaken, including consideration of a severe downside case in which headroom is reduced by 40 per cent. This reduction was selected as a severe but plausible stress-testing assumption to assess the resilience of the business under highly adverse conditions. Based on management’s assessment of current risks and trading conditions, a reasonably possible downside scenario would be expected to result in a headroom reduction of approximately 10–15 per cent. Accordingly, the 40 per cent reduction should be viewed as a severe but plausible stress test rather than management’s central downside expectation.
Our unrestricted core income is funded by fundraising and income-generation activities. Despite the ongoing geopolitical and economic impacts, our financial results show signs of generous giving by our donors, who continue to support generously across the UK, North America, and Europe. Consequently, total income achieved in 2025 amounted to £239 million.
Having considered all these factors, the trustees have concluded that Islamic Relief Worldwide Group can meet its liabilities as they fall due, for the period to 31 July 2027, being more than 12 months from the signing of these financial statements, and that it is therefore appropriate to prepare the group financial statements on a going concern basis.
C. CONSOLIDATION AND GROUP FINANCIAL STATEMENTS
The group financial statements consolidate those of Islamic Relief Worldwide, its trading subsidiary TIC International Limited, registered in England and Wales (company registration number: 02796175, 100 per cent shareholding) and the charity International Waqf Fund, a company limited by guarantee (company registration number: 08612172, registered charity number: 1162805).
The results of TIC International Limited and the International Waqf Fund have been incorporated on a line-by-line basis, in accordance with current legislation.
Islamic Relief Worldwide also controls Islamic Relief UK (company registration number: 05483053). It is registered in England and Wales and during the year the company remained dormant.
Note 7 gives the full details of the income and expenditure of the trading subsidiaries.
D. FUND ACCOUNTING UNRESTRICTED FUNDS
All donations are considered unrestricted unless specifically stated by the donor.
Unrestricted funds comprise the accumulated surplus or deficit on the statement of financial activities which are available for use at the discretion of the trustees of Islamic Relief Worldwide in furtherance of the objectives of the charity.
Restricted funds: These are assigned by the donor, or the terms of the appeal, specified by a particular country or project. The donation and income deriving from them will be used in accordance with the specific purposes.
Endowment (waqf) funds: These are funds that have been given to Islamic Relief Worldwide subject to the restriction that they are to be held as capital or spent on a long-term charitable asset. Waqf is employed to generate a return while the original investment remains intact. Waqf returns are used to cater for long-term projects. Waqf is the Islamic equivalent of endowments.
E. INCOMING RESOURCES AND INVESTMENT INCOME
Income is recognised when the charity has entitlement to the funds, it is probable that the income will be received and that the amount can be measured reliably.
Donations: This comprises all incoming resources from donations and income from fundraising partners on the basis of that which is remitted to Islamic Relief Worldwide in the UK. Donations from individuals are recognised on receipt.
Charitable income: Where related to performance and specific deliverables these are accounted for as the charity earns the right to consideration by its performance. Any grants paid in advance are included in deferred income.
Other trading activities: This comprises income generated by TIC International Limited from its trading activities, its charity shops and the sale of merchandise. Revenue is recognised upon receipt of goods by third parties.
Donated goods for sale in the shops and in the recycling operation are measured at sales prices when sold. Estimating the fair value of donated goods for resale is considered impractical because of the volume of low value items received, the absence of detailed stock control systems in the shops, and market factors.
Investment income: Investment income comprises income generated from waqf investments and rents receivable.
Waqf investment income: Income derived from waqf investments is recognised on receipt basis when the right to receive the income is established. This income forms part of the endowment funds.
Rents receivable: Rental income is recognised on a straight-line basis over the term of the lease.
Deferred income: Donations and grants given to the charity that relates to future accounting periods, the income is deferred until those periods.
F. RESOURCES EXPENDED
All expenditure is accounted for on an accruals basis and is recognised where there is a legal or constructive obligation to pay. Expenditure has been classified under headings that aggregate all costs related to that category.
Costs of generating funds: These are costs incurred in attracting voluntary income and those as stated below under the headings ‘Costs of generating voluntary income’ and ‘Fundraising trading’.
Costs of generating voluntary income: The costs incurred in seeking voluntary contributions.
Fundraising trading: This comprises the group’s trading activities, namely the costs associated with the trading activities of TIC International Limited.
Charitable activities: These are costs associated with the provision of humanitarian relief and development programmes as elaborated on in the trustees, report section, ‘Our global reach.’ These include both the direct costs and support costs relating to these activities.
Governance costs: These are costs associated with the governance arrangements of Islamic Relief Worldwide. Included within this category are strategic costs as opposed to the day-to-day management of Islamic Relief Worldwide’s activities.
Support costs: Support costs for a single activity are allocated directly to that activity. Where support costs r
elate to several activities, support costs have been allocated to each of the activities (stated in Note 10) on the basis of the number of direct staff supported during the period in the relevant activity.
Governance support costs are allocated on the basis of support activities provided on clearly interpreted governance matters.
Investment management cost: This incorporates costs related to the administration of waqf and costs relating to the promotion of the concept of waqf from unrestricted funds; therefore, this element is not charged to capital.
G. OPERATING LEASES
Rentals paid under operating leases are charged to income as incurred.
H. FOREIGN CURRENCIES
Transactions in foreign currencies are recorded at the rate of exchange ruling at the date of transaction. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate ruling at the balance sheet date, and the gains or losses are included in the income and expenditure account. Foreign exchange gains and losses incurred in respect of humanitarian projects overseas are included in the charitable activities expenditure.
The company’s functional and presentational currency is GBP.
l. FIXED ASSETS AND DEPRECIATION
Except for items costing below £500, which are expensed on acquisition, all expenditure of a capital nature is capitalised.
Depreciation is calculated to write off the cost of tangible fixed assets, less their residual values, over their expected useful lives using the straight-line basis.
The expected useful lives of the assets to the business are reassessed periodically in the light of experience:
freehold buildings over 50 years straight-line basis
fixtures and fittings over four years straightline basis
office equipment over four years straight-line basis
motor vehicles over five years straight-line basis
plant and machinery over eight years straight-line basis
depreciation is not charged on land.
Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If such evidence is identified, an impairment loss is recognised in the statement of financial activities.
The charities assets are reviewed for impairment on an annual basis, at the end of the reporting period Islamic Relief Worldwide does not have any amounts to recognise.
J. INTANGIBLES
Intangible assets represent the organisation’s registered trademarks. They are stated at cost, less any impairment loss. The useful life of the trademark is estimated to be 10 years. They are amortised and tested for impairment annually where indicators of impairment are identified.
K. CASH AND CASH EQUIVALENTS
Cash at bank and cash in hand includes non interest-bearing accounts held at call with banks, and cash at hand. Cash equivalents includes monies deposited for less than 90 days or available within a 90-day notice period, without interest penalty.
L. STOCKS
Stocks and inventories are stated at the lower of cost and estimated selling price less costs to sell. In respect of work in progress and finished goods, cost includes a relevant proportion of overheads according to the state of completion.
M. INVESTMENTS
Investments consist of unlisted investments, subsidiary undertakings, and property.
Investment property is included at market fair value. Gains are recognised in the statement of financial activities.
N. FINANCIAL INSTRUMENTS
The charity only has financial assets and financial liabilities of a kind that qualify as basic financial instruments. Basic financial instruments are initially recognised at transaction value.
Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If such evidence is identified, an impairment loss is recognised in the statement of financial activities
O. DEBTORS
Debtors are measured at the settlement amount after any trade discount offered.
P. CREDITORS AND PROVISIONS
Creditors and provisions are recognised where the charity has a present obligation resulting from a past event that will probably result in the transfer of funds to a third party, and the amount due to settle the obligation can be measured or estimated reliably.
Creditors and provisions are normally recognised at their settlement amount after allowing for any trade discounts due.
Q. TAXATION
As a registered charity, the company is exempt from taxation of its income and gains to the extent they fall within the charity exemptions in the Corporation Taxes Act 2010 or Section 256 Taxation of Chargeable Gains Act 1992.
The company is unable to recover Value Added Taxation charged on its purchases which is included in the related expense or asset in the accounts.
R. VOLUNTEERS
Islamic Relief Worldwide appreciates the hard work and dedication of its volunteers across the world. Almost 3,000 volunteers engaged in a number of activities including campaigning and programmes. The contribution of volunteers is not recognised in the accounts as it is impractical to value given the absence of a reliable measurement basis.
S. JUDGEMENTS IN APPLYING ACCOUNTING POLICIES AND KEY SOURCES OF ESTIMATION UNCERTAINTY
Preparation of the financial statements requires management to make significant judgements and estimates.
Significant judgements: There are no significant judgements having a material effect on the financial statements.
Significant estimates: There are no significant estimates having a material effect on the financial statements.
Non-exchange transaction
The trading subsidiary’s (TIC International Limited) donated goods for sale in the shops and in the recycling operation are measured at sales prices when sold.
Estimating the fair value of donated goods for resale is considered impractical because of the volume of low value items received, the absence of detailed stock control systems in the shops, and market factors.
T. IN KIND DONATIONS
In Kind Donations are recognised where there is entitlement, there is probability of receipt, and the amounts are measurable. In Kind Donations donated are included in the accounts at their approximate market value at the receipt. In Kind Donations for distribution are included in the accounts at the fair value to the charity when the goods are received and under the control of the charity. Amounts are recognised in inventory until distributed at which point the relevant cost is released to the statement of financial activities.
U. PENSIONS
The charity operates a defined contribution pension scheme for the benefit of its employees. Pension costs are recognised in the month in which the related payroll payments are made. The money purchase nature of the scheme ensures there will be no funding deficit or surplus accruing to the charity in the future.
The pension scheme is independently administered, and the assets of the scheme are held separately from those of the charity.
V. TERMINATION BENEFITS
Termination benefits paid to employees are recognised as an expense in the year in which they are paid or the charity is demonstrably committed to (a) terminate the employment of a employee, or group of employees, before the their normal retirement date, or (b) provide termination benefits as a result of an offer made in order to encourage voluntary redundancy. The termination benefits will be measured at the best estimate of the expenditure required to settle the obligation at the reporting date.
