The Christie NHS FT Annual Report & Accounts 2019-20

1.15 Non Current Asset Investments

1.15.1 Recognition and Measurement Non current asset investments are stated at fair value at the balance sheet date.

1.15.2 Realised and unrealised gains and losses All gains and losses are taken to the Statement of Comprehensive Income as they arise. Realised gains and losses on investments are calculated as the difference between sales proceeds and opening fair value (or cost if purchased since the previous period end). Unrealised gains and losses are calculated as the difference between fair value at the year end and the opening fair value (or cost if purchased since the previous period end).

1.16 Contingencies

Contingent assets (that is, assets arising from past events whose existence will only be confirmed by one or more future events not wholly within the entity’s control) are not recognised as assets, but are disclosed where an inflow of economic benefits is probable. Contingent liabilities are not recognised, but are disclosed in note 18, unless the probability of a transfer of economic benefits is remote. Contingent liabilities are defined as: ● possible obligations arising from past events whose existence will be confirmed only by the occurrence of one or more uncertain future events not wholly within the entity’s control; or ● present obligations arising from past events but for which it is not probable that a transfer of economic benefit will arise or for which the amount of the obligation cannot be measured with sufficient reliability. Under s519A ICTA 1988 the Trust is regarded as a Health Service body and is, therefore, exempt from taxation on its income and capital gains. Section 148 of the 2004 Finance Act provided the HM Treasury with powers to disapply this exemption. Accordingly the Trust is potentially within the scope of corporation tax in respect of activities which are not related to, or ancillary to, the provision of healthcare and where the profits exceed £50,000 per annum. Activities such as staff and patient car parking and sales of food are considered to be ancillary to the core healthcare objectives of the Trust (and not entrepreneurial) and therefore not subject to corporation tax. Any tax liability will be accounted for within the relevant tax year. 1.17 Corporation tax

The Christie Pharmacy Limited, a subsidiary of the Trust, is subject to corporation tax on commercial activities. Corporation tax and deferred tax liabilities have arisen in the year to 31 March 2020.

1.18 Value Added Tax (VAT)

Most of the activities of the Trust are outside the scope of VAT and, in general, output tax does not apply and input tax on purchases is not recoverable. Irrecoverable VAT is charged to the relevant expenditure category or included in the capitalised purchase cost of non-current assets. Where output tax is charged or input VAT is recoverable, the amounts are stated net of VAT.

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