Statement of comprehensive net expenditure
For the Year Ended 31 March 2022
| Note |
2021-22 |
2020-21 |
|
|---|---|---|---|
| Income | 2 | 41 | 59 |
| Staff costs | 2 | (4,324) | (4,262) |
| Purchase of goods and services | 3 | (1,638) | (1,653) |
| Depreciation | 5 | (9) | (10) |
| Amortisation | 5 | (408) | (367) |
| Provision | 8 | 0 | 0 |
| Net operating costs for the year | (6,338) | (6,233) |
The notes on pages 84-97 form part of the financial statements
Statement of financial position
As at 31 March 2022
|
|
Note |
2021-22
£000 |
2020-21
£000 |
|---|---|---|---|
|
Non-current assets |
|
|
|
|
Tangible assets |
5 |
25 |
34 |
|
Intangible assets |
5 |
2,804 |
2,913 |
|
Total non-current assets |
|
2,829 |
2,947 |
|
|
|
|
|
|
Current assets |
|
|
|
|
Other receivables |
6 |
33 |
50 |
|
Total current assets |
|
33 |
50 |
|
|
|
|
|
|
Current liabilities |
|
|
|
|
Provision |
8 |
0 |
0 |
|
Trade & other payables |
7 |
(714) |
(794) |
|
Total current liabilities |
|
(714) |
(794) |
|
|
|
|
|
|
Total net assets |
|
2,148 |
2,203 |
|
|
|
|
|
|
Taxpayers' equity |
|
2,148 |
2,203 |
The notes on pages 84-97 form part of these financial statements.
The Chief Executive and Accountable Officer authorised these financial statements
for issue on 1 November 2022.
Elaine Lorimer – Chief Executive of Revenue Scotland and Accountable Officer
Statement of cash flows
For the year ended 31 March 2022
|
|
Note |
2021-22 |
2020-21 |
|---|---|---|---|
|
Cash flows from operating activities |
|
|
|
|
Net operating costs for the year |
SOCNE |
(6,338) |
(6,233) |
|
|
|
|
|
|
Adjustments for non cash transactions |
|
|
|
|
Audit fee |
10 |
100 |
98 |
|
Depreciation |
5 |
9 |
10 |
|
Amortisation |
5 |
408 |
367 |
|
|
|
|
|
|
Movements in working capital |
|
|
|
|
(Increase)/Decrease in trade and other receivables |
6 |
17 |
(16) |
|
(Decrease)/Increase in provision |
8 |
0 |
(212) |
|
(Decrease)/Increase in trade and other payables |
7 |
(80) |
16 |
|
|
|
|
|
|
Net cash outflow from operating activities |
|
(5,884) |
(5,970) |
|
|
|
|
|
|
Purchase of non-current assets |
5 |
(299) |
(349) |
|
|
|
|
|
|
Net cash outflow from investing activities |
|
(299) |
(349) |
|
Cash flows from financing activities |
|
0 |
0 |
|
Net funding |
|
(6,183) |
(6,319) |
The notes on pages 84-97 form part of the financial statements.
Statement of changes in taxpayers’ equity
For the year ended 31 March 2022
|
|
Note |
General Fund
Reserves 2021-22 |
General Fund |
|---|---|---|---|
|
Balance at 31 March |
|
2,203 |
2,019 |
|
|
|
|
|
|
Net operating costs for the year |
SOCNE |
(6,338) |
(6,233) |
|
Non cash charges – auditor's remuneration |
10 |
100 |
98 |
|
|
|
|
|
|
Net funding |
|
6,183 |
6,319 |
|
|
|
|
|
|
Balance at 31 March |
|
2,148 |
2,203 |
The notes of pages 84-97 form part of these financial statements.
Notes to the Accounts
Statement of Accounting Policies
Basis of accounting
In line with section 12 of the Revenue Scotland and Tax Powers Act 2014, and in accordance with the accounts direction issued by the Scottish Ministers under section 19(4) of the Public Finance and Accountability (Scotland) Act 2000, these financial statements have been prepared in accordance with the 2021-22 Government Financial Reporting Manual (FReM) issued by HM Treasury. The accounting policies contained in the FReM apply International Financial Reporting Standards (IFRS) as adapted or interpreted for the public sector context. The particular policies adopted are described below. They have been applied consistently in dealing with items that are considered material to the accounts.
The accounts are prepared using accounting policies, and where necessary, estimation techniques which are judged to be most appropriate to the particular circumstances for the purpose of giving a true and fair view in accordance with the principles set out in International Accounting Standards (IAS) 8 Accounting Policies, Changing in Accounting Estimates and Errors.
In accordance with the FReM these accounts have been prepared under the historical cost convention and on a going concern basis, which provides that the organisation will continue in operational existence for the foreseeable future.
Accounting convention
The accounts have been prepared in accordance with the historical cost convention modified to account for fair value of non-current assets. Expenditure has been accounted for on an accruals basis.
New Accounting Standards
In accordance with IAS 8, changes to International Financial Reporting Standards (IFRS) that have been issued but not yet effective have been reviewed for impact on the financial statements in the period of initial application. The standards that are considered relevant to Revenue Scotland and the anticipated impact on the accounts are as follows:
IFRS 16 – Leases
We previously reported that this standard was due to come into effect for accounting periods commencing after 1 April 2020.
However HM Treasury agreed with the Financial Reporting Advisory Board (FRAB) to defer the implementation of this standard until 1 April 2022 due to circumstances caused by the COVID-19 pandemic. When implemented the distinction between finance and operating leases is removed and all leases become ‘on balance sheet’.
The FReM interprets and adapts IFRS 16 for the public sector context in several ways.
An assessment has been carried out and this has determined that there are no assets currently falling within the definition of IFRS 16 which require to be included
on the statement of financial position from 1 April 2022, in accordance with the transition arrangements set out in IFRS 16 application guidance originally issued by HM Treasury in April 2019, updated in March 2020 and further in December 2020.
Value Added Tax (VAT)
Revenue Scotland is registered for VAT as part of the Scottish Government VAT group registration which is responsible for recovering VAT on behalf of Revenue Scotland.
Revenue Scotland does not provide any chargeable services and therefore output VAT does not apply. Irrecoverable input VAT is charged to the relevant expenditure category. Where VAT is recoverable, the amounts are stated net of VAT.
Property, Plant, Equipment and Intangible Assets
Recognition
All property, plant, equipment and intangible assets are accounted for as non-current assets unless they are deemed to be held for sale.
Capitalisation
Minor expenditure on equipment and furniture are written off in the year of purchase, as are all other items of a capital nature costing less than £10,000.
Assets under development
Assets under development are shown separately in note 5. Costs are accumulated until the assets is brought into use whereupon it is transferred into the relevant asset class and depreciated.
Staff costs
Where staff have been working on the development, integration and testing of IT software, these costs are included in the amounts capitalised.
Depreciation and Amortisation
Provision for depreciation and amortisation is made so as to write off the cost of non-current assets on a straight line basis over the expected useful lives of the assets concerned. The expected useful lives of assets are regularly and systematically reviewed to ensure that they genuinely reflect the actual replacement cycle ofall assets. Depreciation and amortisation are not charged on assets in the course of development until the month after they are brought into use.
The expected useful lives are as follows:
-
computer equipment, 3 – 10 years
-
IT systems, 3 – 10 years
-
office equipment, 3 – 10 years
-
furniture and fittings, 3 – 15 years.
Asset Valuation
Depreciated and amortised historical cost is used as a proxy for fair value since the assets are low value and have short useful lives. The majority of the intangible assets represent bespoke IT systems and there is no active market for these assets.
Financial instruments
As the cash requirements of Revenue Scotland are met through the Scottish Government, financial instruments play a limited role in creating and managing risk. The only financial instruments within the accounts are financial assets in the form of other receivables, and financial liabilities in the form of trade and other liabilities.
Leases
Operating leases are charged to the Statement of Comprehensive Net Expenditure on a straight line basis over the term of the lease.
Pension costs
Revenue Scotland employees are civil servants who are entitled to be members of the Civil Servant and Others Pension Scheme or the Principal Civil Service Pension Scheme. These are unfunded, multi-employer defined benefit schemes in which Revenue Scotland is unable to identify its share of the underlying assets and liabilities. The schemes are accounted for as defined contribution schemes under the multi-employer exemption permitted in IAS 19 Employee Benefits.
Revenue Scotland’s contribution is recognised as a cost in the year.
Short term employee benefits
The cost of annual leave and flexible working time entitlement earned but not taken by employees at the end of the year is recognised as an accrual of benefits in the financial statements to the extent that employees are permitted to carry forward leave into the following year.
Other receivables
Other receivables are stated at their nominal value.
Trade and other payables
Trade payables are stated at their nominal value.
Provisions for liabilities and charges
A provision is recognised where an outflow of resources is expected as a result of a past event. These are included within the accounts at the estimated value.
2. Staff income and costs
| 2021-22 £'000 |
2020-21 |
|
|---|---|---|
| Income - Seconded staff | 41 | 59 |
| Staff costs Wages and salaries |
2,830 | 2,717 |
| Social security | 294 | 291 |
| Pension | 778 | 722 |
| Seconded-in staff | 76 | 0 |
| Agency | 346 | 735 |
| Less staff costs capitalised | 0 | (203) |
| Total staff costs | 4,324 | 4,262 |
3. Goods and services
| 2021-22 £'000 |
2020-21 £'000 |
|
|---|---|---|
| Staff related costs | ||
|
Board fees & expense |
45 | 52 |
| Travel & subsistence | 0 | 1 |
| Training | 21 | 40 |
| Recruitment | 20 | 22 |
| Supplies & services | ||
| Legal | 148 | 107 |
| Computer & telephone | 330 | 359 |
| Shared services (1) | 352 | 354 |
| Delegated duties (2) | 488 | 463 |
| Other supplies & services | 134 | 157 |
| Audit fee - external (see note 10) | 100 | 98 |
| Total goods & services | 1,638 | 1,653 |
-
In the interests of efficiency, effectiveness and economy, Revenue Scotland and the Scottish Ministers are committed to identifying opportunities for shared services. The amount represents costs charged by the Scottish Government for the following functions:
-
Human Resource management (including, for example: general terms and conditions of service, pay negotiations, pay awards, payroll, pensions and recruitment for senior civil service posts)
-
Financial management (Scottish Government finance systems)
-
Information Systems, Telephony, Information and Library Service
-
Estates and facilities management
-
Internal audit
-
Procurement.
-
Delegated duties represent the amounts payable to the Scottish Environment Protection Agency in relation to the duties delegated to them under the Revenue Scotland and Tax Powers Act 2014.
Reconciliation of net resource outturn to net funding received
|
|
Notes |
2021-22 |
2020-21 |
|---|---|---|---|
|
Resource outturn |
SoCNE |
6,338 |
6,233 |
|
Capital outturn |
5 |
299 |
349 |
|
Non cash charges – auditor's remuneration |
10 |
(100) |
(98) |
|
Depreciation |
5 |
(9) |
(10) |
|
Amortisation |
5 |
(408) |
(367) |
|
Changes in working capital |
SoCF |
63 |
212 |
|
|
|
|
|
|
Net funding |
|
6,183 |
6,319 |
Non-current assets
Tangible Assets
|
|
Furniture & Fittings |
2021-22 |
2020-21 |
|---|---|---|---|
|
Cost |
|
|
|
|
At 1 April |
76 |
76 |
76 |
|
Additions |
0 |
0 |
0 |
|
At 31 March |
76 |
76 |
76 |
|
|
|
|
|
|
Depreciation |
|
|
|
|
At 1 April |
42 |
42 |
32 |
|
Charged in the year |
9 |
9 |
10 |
|
At 31 March |
51 |
51 |
42 |
|
|
|
|
|
|
Asset financing |
|
|
|
|
Owned |
25 |
25 |
34 |
|
Carrying amount at 31 March |
25 |
25 |
34 |
Intangible Assets
| IT System under development £000 |
IT System £000 |
Telephony £000 |
2021-22 Total £000 |
|
|---|---|---|---|---|
|
Cost |
||||
| At 1 April | 0 | 3,404 | 70 | 3,474 |
| Additions | 0 | 282 | 17 | 299 |
| Transfers | 0 | 0 | 0 | 0 |
| At 31 March | 0 | 3,686 | 87 | 3,773 |
|
Amortisation |
||||
| At 1 April | 0 | 525 | 36 | 561 |
| Charged in the year | 0 | 397 | 11 | 408 |
| At 31 March | 0 | 922 | 47 | 969 |
| Asset Financing | ||||
| Owned | 0 | 2,764 | 40 | 2,804 |
| Carrying amount at 31 March | 0 | 2,764 | 40 | 2,804 |
| Prior Year | IT System under development £000 |
IT System £000 |
Telephony £000 |
2020-21 Total £000 |
|---|---|---|---|---|
|
Cost |
||||
| At 1 April 2020 | 324 | 2,731 | 70 | 3,125 |
| Additions | 349 | 0 | 0 | 349 |
| Transfers | (673) | 673 | 0 | 0 |
| At 31 March 2021 | 0 | 3,404 | 70 | 3,474 |
|
Amortisation |
||||
| At 1 April | 0 | 165 | 29 | 194 |
| Charged in the year | 0 | 360 | 7 | 367 |
| At 31 March 2021 | 0 | 525 | 36 | 561 |
| Asset Financing | ||||
| Owned | 0 | 2,879 | 34 | 2,913 |
| Carrying amount at 31 March 2021 | 0 | 2,879 | 34 | 2,913 |
6. Other receivables
|
Amounts falling due within one year: |
2021-22
£000 |
2020-21
£000 |
|---|---|---|
|
Prepaid expenses |
31 |
32 |
|
Sundry debtors |
2 |
18 |
|
|
|
|
|
Total receivables within one year |
33 |
50 |
7. Trade and other payables
|
Amounts falling due within one year: |
2021-22 |
2020-21 |
|---|---|---|
|
Trade payables |
27 |
43 |
|
Social security and payroll related |
178 |
138 |
|
Accrued short-term employee benefits (see note 1.9) |
187 |
172 |
|
Other accruals |
322 |
441 |
|
|
|
|
|
Total payables within one year |
714 |
794 |
8. Provision for liabilities and charges
|
|
2021-22 |
2020-21 |
|---|---|---|
|
Balance at 1 April |
0 |
212 |
|
Utilised in year |
0 |
(212) |
|
Balance at 31 March |
0 |
0 |
|
Analysis of timing |
2021-22 |
2020-21 |
|---|---|---|
|
Not later than one year |
0 |
0 |
9. Related party transactions
Revenue Scotland is a non-ministerial office of the Scottish Administration and it considers that the Scottish Government, its agencies and non-departmental bodies are related parties within this context.
During the year Revenue Scotland had a number of material financial transactions with the Scottish Government. Those relating to shared services provided are detailed in note 3 above. In addition some staff were both seconded to and seconded from Scottish Government during the year. Income and costs associated with these secondments are shown in note 2 above.
In line with RSTPA, section 2, Revenue Scotland has delegated some of its functions relating to SLfT to the Scottish Environment Protection Agency (SEPA). The costs incurred are provided in note 3 above.
None of the Board members, key managerial staff or other related parties has undertaken any material transactions with Revenue Scotland during the year.
10. Audit fee
| 2021-22 £000 |
2020-21 £000 |
|
|---|---|---|
| Auditor's fee - resource accounts | 22 | 21 |
| Auditor's fee - devolved taxes account | 78 | 77 |
| Total Auditor's fees | 100 | 98 |
Auditor’s remuneration is disclosed as a notional charge and relates to fees notified to Revenue Scotland by Audit Scotland in respect of audit work carried out to the year ended 31 March 2022. All audit fees are paid from the Scottish Consolidated Fund.
No non-audit work was carried out by Audit Scotland during the year ended 31 March 2022.
11. Commitments
Revenue Commitments
Total future minimum payments under contractual commitments are given in the tables below for each of the following periods.
|
|
2021-22
£000 |
2020-21
£000 |
|---|---|---|
|
IT Systems |
|
|
|
Not later than one year |
256 |
307 |
|
Between one and five years |
966 |
1,159 |
|
Beyond five years |
302 |
652 |
|
Total revenue commitments |
1,524 |
2,118 |
The amounts above are in relation to the contracts for the provision of Revenue Scotland’s tax and finance systems. The contract for the tax system expires in 2029 and that for the finance system expires in December 2022.
Amounts charged in 2021-22 of £274,000 (2020-21: £317,000) are included within computer and telephone charges in note 3 above. The fall in amount relates to a change in VAT treatment on service costs provided for the tax system.
Capital Commitments
| 2021-22 £000 |
2020-21 |
|
|---|---|---|
| IT Systems | ||
| Not later than one year | 94 | 0 |
| Total capital commitments | 94 | 0 |
The amounts above relate to orders placed in 2021-22 for IT hardware delivered in 2022-23.