House of Commons Refreshment Department Trading Account 1998-99 Notes to the Accounts

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Notes to the Accounts - continued



Corporation Tax at Standard Rates  57,677  23,380
Income Tax at Standard Rates  681  10,005
   58,358  33,385


    Under arrangements approved by the House of Commons Commission in March 1993, a sum equivalent to 10 per cent of annual turnover is allocated from the retained surplus to provide Working Capital and to finance minor works and capital expenditure by the Department. During the year the Department incurred no costs for minor works, and no funding for capital assets was required from the Working Capital fund.

    Working Capital accumulated in excess of this approved allocation is transferable to the House of Commons Administration Vote for surrender to the Consolidated Fund.

    The remainder of the retained surplus is set aside for contributions to the House of Commons Works Vote towards capital improvements benefiting the Refreshment Department, at the discretion of the House of Commons Commission. All interest income (net of tax) is credited to this major works allocation. It was originally agreed that the allocation would be utilised over the 3 years ending 31 March 1999. However, it was subsequently decided that the period for utilisation would be extended to the year ending 31 March 2000. A contribution of £500,000 was made to the Works Vote during the year.

    The retained surplus is analysed as follows:

   Working Capital
 Major Works Allocation
Balance at 3 April 1998  421,324  1,972,718  2,394,042
Operating Surplus for the period  357,813    357,813
Interest Income and gain on investments (net of tax)    219,717  219,717
Amount transferred from Capital Asset Reserve  24,507    24,507
Amount transferred to House of Commons Works Vote    (500,000)  (500,000)
Amount Transferable to House of Commons Administration Vote  (348,266)    (348,266)
Balance at 1 April 1999  455,378  1,692,435  2,147,813


    The Refreshment Department maintains a capital assets reserve which represents the net book value of tangible fixed assets funded from the working capital reserve within the Income and Expenditure account.

Balance at 3 April 1998  72,253  96,737
Transfer to Income and Expenditure account  (24,507)  (24,484)
Balance at 1 April 1999  47,746  72,253


   Computer Equipment
 Other Equipment
At 3 April 1998  142,932  91,727  234,659
Additions  25,296  6,855  32,151
At 1 April 1999  168,228  98,582  266,810
At 3 April 1998  107,174  55,232  162,406
Charge for the year  36,942  19,716  56,658
At 1 April 1999  144,116  74,948  219,064
Net Book value at 1 April 1999  24,112  23,634  47,746
Net Book value at 2 April 1998  35,758  36,495  72,253


    Included in stocks of £222,598 are £4,266 of laid down wines which may not be sold within one year. In accordance with industry practice, these are classified as a current asset.


Trade Debtors  352,416  388,864
Prepayments  3,376  3,858
Accrued Interest  102,791  21,844
   458,583  414,566


Trade Creditors  181,041  212,012
Current Corporation Tax  53,901  23,742
Value Added Tax  112,679  125,016
Members' Deposits  133,700  152,079
Other Creditors  331,547  330,579
Amount Transferable to House of Commons Administration Vote  348,266  605,440
   1,161,134  1,448,868


    The Department withheld payment of £30,408 from a supplier for work they considered defective. The Department consider it unlikely that the supplier will take action to recover these monies and accordingly no provision for any liability has been made in the Accounts.


    The permanent staff of the Refreshment Department are House of Commons Staff who participate in the House of Commons Staff Pension Scheme, a scheme which is analogous to the Principal Civil Service Pension Scheme. The Refreshment Department has no liability for the funding of the Pension Scheme beyond the payment of employer contributions for those permanent staff borne on the Trading Account. The rates of contribution are determined from time to time by the Government Actuary and advised by the House of Commons to the Department. For 1998-99, contributions incurred by the Refreshment Department were £45,766. The rates applicable for the year (as in 1997-98) were between 11 and 13.5 per cent of salary.


    The target for the Refreshment Department's 1998-99 Trading Account operating surplus was 5 per cent of turnover, which compares to the actual operating surplus at 8 per cent of turnover.


    The House of Commons is regarded as a related party. During the year, the Refreshment Department has undertaken material transactions with the House of Commons as disclosed in the accounts and notes. The House of Commons also provides personnel and payroll services for banqueting and kiosk staff borne on the Trading Account. None of the Catering Committee members, the Finance and Services Committee members or the House of Commons Commission members, key management staff or other related parties has undertaken any material transactions with the Department during the year other than transactions occurring in the normal course of the Refreshment Department's activities and on normal business terms.


    It is expected that the Refreshment Department Trading Account will be incorporated into the House of Commons Resource Account from 1999-2000. As a consequence, a separate account will no longer be audited and published. This change will have no impact on the Department's trading operations.

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Prepared 27 July 1999