Employee Benefit Trust
The company has purchased a Trust for the benefit of employees and certain of their dependants. Monies held in this Trust are held by independent trustees and managed at their disrection.
Where the company retains future economic benefit from, and has de facto control of the assets and liabilities of the Trust, they are accounted for as assets and liabilities of the company until the earlier of the date that an allocation of Trust funds to employees in respect of past services is declared and that assets of the Trust vest in identified individuals.
Where monies held in a Trust are determined by the company on the basis of employees' past services to the business and the company can obtain no future economic benefit from those monies, such monies, whether in the Trust or accrued for by the company are charged to the profit and loss account in the period to which they relate.
H.M. Revenue & Customs have enquired into the nature of the treatment of the payments to the Employee Benefit Trust. An appeal is active and no liability is expected to arise on the company. During the year accelerated payments determined by HMRC relating to the disputed tax and national insurance contributions were paid by the company of £125,013. These sums are repayable in the event of a successful appeal outcome and are reflected in other debtors.
Grants
Grants relating to revenue are recognised in profit and loss on a systematic basis over the periods in which the company recognises the related costs for which the grant is intended to compensate.
Capital - based grants are recognised in profit and loss on a systematic basis over the useful economic life of the asset matching the associated depreciation charges.