1. Accounting policies
Basis of preparation
The financial statements are prepared under the historical
cost convention, modified to include the revaluation of
investments to fair value, and in accordance with applicable
accounting standards in the United Kingdom, the Statement of
Recommended Practice (SORP) 'Accounting and Reporting by
Charities' and Financial Reporting Standard (FRS) 102, together
with the reporting requirements of the Companies Act 2006, the
Charities Act 2011, the Charities and Trustee Investment (Scotland)
Act 2005 and the Charities Accounts (Scotland) Regulations 2006.
Macmillan is a public benefit entity.
These financial statements consolidate the results of the
Charitable Company and its wholly owned subsidiary company;
Macmillan Cancer Support Trading Limited on a line-by-line
basis. During 2023, the trade of Macmillan Healthcare Lottery
Limited, Macmillan Financial Grants Lottery Limited, Macmillan
Cancer Information Lottery Limited and Macmillan Influencing
Cancer Care Lottery Limited was transferred to Macmillan Cancer
Support as part of a group restructure. See note 8 for more
information. Uniform accounting policies are adopted across
the Group and inter company transactions are eliminated on
consolidation. Cancerbackup and Macmillan Cancer Support
Enterprises were dormant in 2022 and 2023, and have both been
excluded from the consolidated financial statements on the basis
of materiality. The Charity also has an investment in an associate
which is a programme related investment and is accounted for
under the equity method in the consolidated financial statements,
see note 15. A separate Statement of Financial Activities for
the Charity itself is not presented as allowed by Section 408 of
the Companies Act 2006 and paragraph 5.1 of the SORP 2015.
The income of the parent Charity was £230,598,000 (2022:
£220,399,000) and the expenditure was £263,268,000 (2022:
£244,914,000). The net expenditure of the Charity after recognised
gains of £2,546,000 (2022: £1,338,000 losses) was £30,124,000
(2022: £25,853,000). The Charity has taken advantage of the
exemption from preparing a Cash Flow Statement under FRS 102
Section 1.12(b). The cash flows of the Charity are included in the
Consolidated cash flow statement.
The accounting policies have been consistently applied across
the Group from year to year in accordance with FRS 102.
Critical accounting estimates
In the preparation of the financial statements, accounting
estimates are made. The most significant areas of estimation that
affect items in the financial statements are to do with estimating
the accrued legacy income for the year and the estimate of
grant commitments not yet paid falling due after more than
one year, including an adjustment to reflect the valuation to its
present value.
Accrued legacy income is estimated based on the best
information available at the balance sheet date. There is inherent
uncertainty in the probate valuation of estates as a result of the
nature of underlying assets and liabilities, the time that may
elapse between probate and closure, and other contingencies
that attend the estate. In calculating the accrued value of each
estate we apply an estimated deduction of 8% (2022: 8%) for
costs incurred in administering the estate. This percentage
is based on the average costs that have been incurred over
a three year period. In 2023, accrued legacy income totalled
£83,997,000. See note 1, 'Legacy income' and notes 2 and 20 for
more information on the accrued legacy income.
The value of grant commitments not yet paid falling due after
more than one year is estimated based on the portfolio of
outstanding grant commitments as at the reporting date, using
historical experience of payment of similar grant types. The
Bank of England base rate is used when calculating the discount
applied to payments due after more than one year to reflect
the valuation at its present value. In 2023, this resulted in a
grant commitment falling due after more than one year figure of
£84,045,000. See note 1, 'Grant commitments' and notes 18 and 21
for more information on grant commitments.
Critical accounting judgements
In the preparation of the financial statements, accounting
judgements are also made. The most significant area of
judgement that affects items in the financial statements relates
to the defined benefit pensions surplus.
As per FRS 102, Macmillan can only recognise a surplus on its
defined benefit pension scheme if there is a right to a refund.
Such a refund would only occur on wind up of the scheme as
there are no other provisions for a refund in the consolidated
scheme rules. Macmillan believe that they do not have sufficient
control over the surplus to be able to recognise the asset as they
cannot be certain of the surplus figure continuing to be so in
the future and the balance may not continually be recoverable.
Macmillan have therefore exercised judgement in not
recognising this asset on the consolidated balance sheet. If we
were to recognise this, it would result in an asset of £9,314,000.
See note 1, 'Pensions' and note 30 for more information on the
defined benefit pension scheme.
Another area of critical judgement is our treatment of current
asset investments, which are held in an overnight deposit money
market fund. These funds are held for investment purposes,
rather than for operational cash flow requirements, and are not
subject to an insignificant risk of changes in value, and therefore
are not disclosed as cash and cash equivalents.
Going concern
In determining the appropriate basis of preparation of the
financial statements for the year ended 31 December 2023,
the Trustees are required to consider whether Macmillan
Cancer Support can continue in operational existence for the
foreseeable future.
As at 31 December 2023 Macmillan had cash and investment
balances of over £95 million (2022: £142 million) as outlined in
the liquidity and reserves sections of the annual report, well
above the revised target minimum liquidity of £70 million that
the Trustees have set in order to remain in a financially strong
position and be able to maximise support for those living
with cancer.
The Trustees, after reviewing Macmillan's budgets, business
plans, liquidity forecasts and investment and cash reserves,
consider that the Group and Charity have sufficient resources
and liquidity available at the date of approval of this report and
for a period of at least 12 months from the date of signing these
financial statements. Accordingly, the Trustees are satisfied that
it is appropriate to adopt the going concern basis in preparing
the Annual Report and financial statements.
Taxation
As a registered charity, the Charity benefits from rates relief and
is exempt from corporation tax on its charitable activities but
not from VAT. Irrecoverable VAT is included in the cost of those
items to which it relates. The subsidiary undertakings do not
generally pay direct tax because their policy is to Gift Aid their
taxable profits to the Charity.
Notes to the financial statements
For the year ended 31 December 2023
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Environmental, social
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Financial review
Strategic report
Overview
Financial statements
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