Hartpury Annual Report July 2025

Hartpury University Annual Report and Financial Statements > 2024/2025

Notes to the Financial Statements (continued) Year Ended 31 July 2025

Taxation

Financial instruments

Current tax, including UK corporation tax and foreign tax, is provided at amounts expected to be paid (or recovered) using the tax rates and laws that have been enacted or substantively enacted by the reporting date. Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the reporting date where transactions or events have occurred at that date that will result in an obligation to pay more tax, or a right to pay less tax, in the future. Deferred tax is measured at the tax rates expected to apply in the periods in which the timing differences are expected to reverse, based on tax rates and laws that have been enacted or substantively enacted at the reporting date. Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Deferred tax assets and liabilities are not discounted. The Institution is an exempt charity within the meaning of Part 3 of the Charities Act 2011. It is therefore a charity within the meaning of paragraph 1 of Schedule 6 to the Finance Act 2010 and accordingly is potentially exempt from UK corporation tax in respect of income or capital gains received within categories covered by sections 478–488 of the Corporation Tax Act 2010 (CTA 2010) or section 256 of the Taxation of Chargeable Gains Act 1992, to the extent that such income or gains are applied exclusively to charitable purposes. The Institution receives no similar exemption in respect of Value Added Tax (VAT). Irrecoverable VAT on expenditure, both revenue and capital, is included in the cost of that expenditure. Any irrecoverable VAT allocated to fixed assets is included in the cost of those assets. The Institution’s subsidiary companies Limbury Ltd, Rudgeley Ltd, and Hartpury Rugby Limited are subject to corporation tax and VAT in the same way as commercial organisations. Hartpury College Ltd is an exempt charity within the meaning of Part 3 of the Charities Act 2011.

The Institution has elected to adopt Sections 11 and 12 of FRS 102 in respect of the recognition, measurement, and disclosure of financial instruments. Financial assets and financial liabilities are recognised when the Institution becomes party to the contractual provisions of the instrument and are classified according to the substance of the contractual arrangements into which it has entered. Financial assets and financial liabilities are offset only when there is a legally enforceable right to set off the recognised amounts and there is an intention either to settle on a net basis or to realise the asset and settle the liability simultaneously. Basic financial assets include trade and other receivables, cash and cash equivalents, and investments in commercial paper (such as deposits and bonds). These assets are initially recognised at the transaction price unless the arrangement constitutes a financing transaction. Where a financing transaction exists, the asset is measured at the present value of future receipts discounted at a market rate of interest. Such assets are subsequently carried at amortised cost using the effective interest rate method. Financial assets are assessed for indicators of impairment at each reporting date. Where there is objective evidence of impairment, an impairment loss is recognised in the Statement of Comprehensive Income. For financial assets carried at amortised cost, the impairment loss is measured as the difference between the carrying amount of the asset and the present value of the estimated future cash flows, discounted at the asset’s original effective interest rate. Other financial assets, including investments in equity instruments that are not subsidiaries, associates, or joint ventures, are initially measured at fair value, which is normally the transaction price. These assets are subsequently carried at fair value, and changes in fair value at the reporting date are recognised in the Statement of Comprehensive Income. Where investments in equity instruments are not publicly traded and their fair value cannot be reliably measured, they are measured at cost less impairment. Financial assets are derecognised when the contractual rights to the cash flows from the asset expire or are settled, or when substantially all of the risks and rewards of ownership of the asset have been transferred to another party. Financial assets

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