APPROPRIATION ACCOUNTS 1996-97
VOLUME 16: CLASS XVI-DEPARTMENTS OF THE
CHANCELLOR OF THE EXCHEQUERVOTE 3: HM CUSTOMS & EXCISE: ADMINISTRATION
REPORT OF THE COMPTROLLER AND AUDITOR
GENERAL: PARAGRAPHS 1-77: (HC251-XVI)
Memorandum submitted by the Comptroller
and Auditor General
Memorandum submitted by HM Customs and
Excise
COMPTROLLER AND AUDITOR GENERAL'S REPORT
ON MATTERS ON THE 1996/97 ACCOUNTS (PAC 97-98/255)
Copy of a letter from Chairman, HM Customs
& Excise Updating figures 11 & 13 of the NAO's report(HC
251-XVI)
I should be grateful if you would draw the attention
of the Committee to a matter which came to light after publication
of the report.
Figure 13: Analysis of Age of Outstanding VAT
Liability
In the column for total debt at 31/3/97 an adjustment
of £354.8m is made to reflect timing differences between
the recording of liabilities and the accompanying payments. This
figure was calculated by conducting a year-end interrogation of
the files for all traders controlled by the Large Payers' Unit.
In researching why the figure for total repayment debt has increased
so substantially (from £115.7m on 31 March 1996 to £207.8m
on 31 March 1997), we discovered that the £207.8m included
an exceptional item of £113.7m which, like the £354.8m
adjustment figure, reflected a timing difference between recording
the liability and the accompanying payment. The exceptional item
related to a trader undergoing corporate restructuring who was
reclassified from repayment trader to payment trader at a late
stage in the year, but who was not taken under the control of
the Large Payers' Unit until after the year end interrogation.
The total debt at the end of the year was therefore less than
set out in the report. The figures in the table should be £468.5m
for the adjustment and £1,340.5m for the totals. The adjustment
for the total debt does not change the value of the debt over
six months old, but it does increase the percentage from 33.1%
to 35.9%. I have attached a revised figure 13 for ease of reference.
These changes also affect the information displayed
in figure 11, where the average month end arrears should be amended
from £1,475m to £1,466m and the total arrears over six
months old should be 35.9%. The average month end arrears as a
percentage of annual liability remains unchanged at 2.2%.
Again I attach a revised figure for ease of
reference.
I am copying this letter to Sir John Bourn.
Chairman
HM Customs & Excise
21 April 1998
Figure 11: VAT arrears-national performance indicators
|
| 1994-95 | 1995-96
| 1996-97 |
|
| Average month end arrears | £1.390m
| £1.448m | £1.466(1)m
|
| Average month end arrears as a percentage of annual liability declared by payment traders
| 2.5% | 2.3% | 2.2%(2)
|
| Total arrears over 6 months old | 30%
| 29% | 36%(1) |
|
(1) These figures have been adjusted to reflect improvements
in the measurement of month end liabilities, they cannot therefore
be compared directly to the previous years.
(2) The target was 2.3 per cent for 1996-97, no targets were
set for this ratio for 1994-95 or 1995-96.
Source of data: HM Customs and Excise
Figure 13: Analysis of Age of Outstanding VAT Liability (excluding
penalties and interest)
|
| | Total Debt
| Over 6 Months
|
| 31/03/96 | 31/03/97
| 31/03/96 | 31/03/97
|
|
| £m | £m
| £m | £m
|
| | | |
| |
| Insolvent | 14.6 | 11.5
| 11.0 | 6.5 |
| Missing | 40.8 | 47.6
| 28.2 | 34.2 |
| De-registered | 166.9 |
150.9 | 123.8 | 112.5
|
| Repayment | 115.7 | 207.8
| 20.2 | 32.4 |
| Civil Recovery | 83.9 |
86.5 | 39.9 | 42.7
|
| Time to Pay | 105.5 | 78.3
| 22.2 | 20.5 |
| Manual Control | 94.4 |
130.0 | 53.9 | 75.9
|
| Local Office | 463.2 | 479.1
| 130.4 | 152.4 |
| Other(1) | 375.2 | 617.3
| 3.2 | 4.2 |
| Less: Adjustment(2) | |
(468.5) | | |
|
| Totals(2) | £1,460.2m
| £1,340.5m | £432.8m
| £481.3m |
| Percent over 6 months(2) |
| | 29.6% | 35.9%
|
|
(1) The "Other" category largely consists of the
current liability of traders who settle their account with Customs
and Excise directly through the bank by credit transfer.
(2) The adjustment reflects timing differences between the
recording of liabilities and the accompanying payments. As this
adjustment cannot be made for 31 March 1996 the figures for total
debt outstanding and the percentage over 6 months at 31 March
1996 and 31 March 1997 are not directly comparable.
Source of data: HM Customs & Excise2
| 
