Margaret Hodge – 2016 Parliamentary Question to the HM Treasury

The below Parliamentary question was asked by Margaret Hodge on 2016-10-19.

To ask Mr Chancellor of the Exchequer, with reference to paragraph 7.2, Heading contingent liabilities, page 176 of the Annual Report and Accounts 2015-16 of HM Revenue and Customs, published in December 2015, under what area of legislation are those cases of current liability.

Jane Ellison

The Trust Statement is prepared in accordance with International Financial Reporting Standards adapted or interpreted for public sector context.

International Accounting Standard 37 – ‘Provisions, Contingent Liabilities and Contingent Assets’ is the standard that HM Revenue and Customs (HMRC) follows when calculating the level of contingent liability to be included with the disclosure notes to the Trust Statement. The contingent liabilities relate to legal cases for which the outcome is uncertain and HMRC considers that there is only a possible rather than probable likelihood that they will be required to make a payment, or the amount cannot be reliably measured.

These cases are not current liabilities – they are a possible obligation dependent on whether some uncertain future event occurs.