Financial accounting and reporting updates

NHS providers should refer to this page for the latest updates on financial accounting and reporting. We also email updates to finance teams.

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International Financial Reporting Standard (IFRS) 16 Leases

Our IFRS 16 guidance now has its own webpage. The latest updates will listed on this page.

Current form and submission issues

Please refer to the known issues document on provider portals for any known issues with the current PFR form.

Latest financial reporting updates

Referencing directions in late 2021/22 accounts – 6 July 2022

The following text provides guidance on references in 2021/22 accounts finalised after 1 July 2022. In summary no changes to template disclosures are required.

NHS trusts

There are no changes to the template disclosures provided for NHS trust annual reports and accounts for 2021/22.

  • For annual reports, the change in the Health and Care Act transferring this power to NHS England commences on 1 July. However, a saving provision in regulations will mean that the changes do not apply to annual reports for the financial year 2021/22 – so the existing Secretary of State power continues to apply to those reports.
  • For accounts, DHSC has reissued its accounts direction to update a legislative reference. This will be published in the 2022/23 Group Accounting Manual (GAM) and is attached here for reference. There are no changes in substance and NHS trusts’ disclosures should continue to refer to a direction from the Secretary of State

NHS foundation trusts

There are no changes to the template disclosures provided for NHS foundation trust annual reports and accounts for 2021/22.

  • While Monitor is abolished as entity from 1 July 2022, its functions transfer to NHS England and directions issued by Monitor continue in force. As such 2021/22 annual reports and accounts finalised after 1 July 2022 should continue to refer to directions issued by Monitor.
  • New directions will be issued for the 2022/23 financial year by NHS England.


(This guidance is included here for ease of reference for local auditors to publish in one place.)

There are no changes to the template disclosures provided for CCG annual reports and accounts for 2021/22.

  • Directions were originally issued in the legal name of the NHS Commissioning Board. It is now in force that the legal name of the entity is NHS England, but this name change does not affect the legal status of the directions, and references to the Board should now to be read as references to NHS England.
  • Transitional provisions in regulations require ICBs to finalise their predecessor CCG(s) reports and accounts for 2021/22. ICBs will also be responsible for producing CCG annual reports and accounts for the period 1/4/22 to 30/6/22. Directions for these are available separately via NHS England Sharepoint.

2021/22 year end timetable letter – 4 February 2022 (updated 24 June 2022)

The NAO has set a deadline of 30 September for local auditors to finalise their work and reporting on value for money arrangements for 2021/22.

We have updated our 2021/22 timetable letter to include:

  • A 30 September deadline for finalising annual report and accounts for 2021/22, and publishing by NHS trusts
  • Deadlines for further tranches of laying before Parliament for NHS foundation trusts, and guidance on what to do if an FT is unable to meet the 30 September date above due to delayed laying.

Timetable letter:

Accounts payable addresses for ICBs from 1 July – 15 June 2022

NHS SBS has been working closely with NHS England to ensure accounts payable processes are up and running for ICBs from 1 July. Accounts payable addresses for all ICBs from 1 July can be found here. Please use this information to update local finance systems.

A mapping document of CCGs to ICBs is also available here. Any outstanding invoices on CCG ledgers are expected to be transferred to ICB ledgers during July.

Reminder: special payments  – 10 June 2022

NHS providers are reminded that all special severance payments of any value require approval in advance of agreeing the payment. The NHSE&I team has guidance at and can be contacted at

In addition all special payments (not special severance payments) above £95k – and those of any value that may be considered novel, contentious or repercussive – require approval as explained in our letter of April 2021. The mailbox for these matters is . Guidance on the definition of special payments is provided in Managing Public Money, annex 4.13: (second file). Providers are reminded this includes retention payments to staff or a group of staff.

Please ensure special payment disclosures in 2021/22 accounts and TAC schedules are complete.

Month 3 agreement of balances (AoB)  – 10 June 2022

To support the transition from CCGs to ICBs on 1 July 2022, and the abolition of Monitor and the NHS TDA, an agreement of balances exercise will be run. This will be a full exercise (so will include receivables/payables, income/expenditure and accruals) but will only involve transactions and balances where one or more parties is a CCG, London Shared Services (NELCSU) or Monitor/TDA. For providers therefore this means agreeing with CCGs and London Shared Services, but not, for example, with NHS England regions or other providers.

The Department has published the month 3 AoB guidance, timetable and appendix 2 on their website. The final contact list and Annex 5 documents are now available on your NHS Improvement Portal. These are located in the “Agreement of balances” folder in the additional documents section; note there is a subfolder for month 12 and month 3 documents. Each document can be downloaded by clicking the three dots to the right of the document, then the three dots at the bottom of the dialog box that opens, then selecting ‘download a copy’.

As confirmed in the timetable previously issued, submissions are required from all providers please by noon on 14 July and resubmission on 22 July.

Low volume activity (LVA) accruals at month 3

Low volume activity (LVA) payments will be made later in the year. CCGs will be accruing the cost of 3/12ths of the anticipated payments in their closing accounts. Providers should therefore include three month income accruals against CCGs for this exercise. LVA schedules have been published by the Financial Planning team and can be found in the ‘additional documents’ section of the portal. This includes a schedule which has been split by CCG to enable the first 3 months to be accrued against the correct commissioner.

Audited accounts and annual report submission checklist – 1 June 2022

We have prepared our annual year end checklist to aid providers with preparations for submitting the audited annual report and accounts. This checklist contains no new information but is available to download if useful.

FT Annual Reporting Manual 2021/22 update – 6 May 2022

We’ve made a minor update to the FT ARM to improve the suggested format for the NHS staff survey disclosure to align with the new format of the survey.

DHSC GAM 2021/22 update – 22 April 2022

Updates to the GAM for 2021/22 have now been published: DHSC group accounting manual 2021/22

The key updates for providers are:

  • For NHS trusts – updated FAQ3: gives guidance for the remuneration report pensions table for senior managers opted out of pension scheme arrangements (this is the same as the FT ARM)
  •  For NHS trusts – updated FAQ3: updates to fair pay disclosure based on clarity received from HMT in January. This aligns the requirements in the GAM and FT ARM
  •  For NHS trusts and NHS foundation trusts – FAQ7: PDC dividend calculation update..

NHS pension scheme disclosure for 2021/22 – 22 April 2022

The template disclosure on the NHS pension scheme for inclusion in 2021/22 accounts is now available.

TAC Completion Instructions – 23 March 2022

These instructions give guidance on completing the Trust Accounts Consolidation (TAC) schedules for month 12 2021/22.

Month 9 TAC feedback on common errors – 8 March 2022

This document lists common errors made in Trust Accounts Consolidation (TAC) schedules at month 9 2021/22. Providers are asked to please ensure any issues impacting your Trust are addressed at month 12.

NHS foundation trusts: FT Annual Reporting Manual (FT ARM) 2021/22 – 2 March 2022

The  FT ARM 2021/22 has now been published.

To facilitate copying, a Word document of the model Annual Governance Statement (AGS) and other certificates/statements needed for the annual report and accounts is also available below.

NHS trusts: 2021/22 annual governance statement and certificates for year end accounts – 25 February 2022

The following document provides guidance to NHS trusts preparing annual governance statements (AGS) for their annual reports. It also contains the required formats for other certificates/statements for year end accounts.  A Word document is also provided to facilitate copying. This does not apply to NHS foundation trusts who should follow the formats prescribed by the FT ARM.

TAC Completion Instructions – 21 December 2021

These instructions give guidance on completing the Trust Accounts Consolidation (TAC) schedules for month 9 2021/22.

Updates to IFRS 16 webpage – 16 December 2021

Further updates have been made to our IFRS 16 webpage:

  • adding guidance for IFRS 16 impact forecast exercise, as was issued to the NHS on 9 December
  • adding an updated version of DHSC’s lease accounting tool
  • adding worked example scenario 12

Injury Cost Recovery (ICR): probability percentage – 7 December 2021

The Compensation Recovery Unit (CRU) advises a percentage probability of entities not receiving ICR income. The CRU advises the percentage for 2021/22 is 23.76%. For 2020/21 the percentage was 22.43%. Updated guidance has been published here.

Month 9 submission dates – updated 7 December 2021

In advance of a full 2021/22 financial reporting timetable being issued, the submission dates for month 9 for NHS trusts and NHS foundation trusts are:

  • Month 9 PFR (incorporating TAC schedules) full submission with receivables and payables AoB data: Tuesday 25 January 2022, noon
  • Month 9 PFR AoB submission of income and expenditure data: Tuesday 8 February 2022, noon
  • Month 9 PFR AoB resubmission of income/expenditure and receivables and payables data: Friday 25 February 2022, noon

A full month 9 timetable including submission instructions and agreement of balances dates is available here.

MHCLG-led consultation on local audit system leadership – 5 August 2021

In 2020 MHCLG sponsored the Redmond Review into local government accounts and audit. One of the recommendations from that review was to improve system leadership in local audit, as at present a number of different organisations are involved. Separately, BEIS is working on establishing the Audit Reporting and Governance Authority (ARGA), as a replacement for the Financial Reporting Council (FRC). MHCLG is proposing an additional function be given to ARGA as the established system leader for local audit. We and DHSC have worked with MHCLG and we are proposing that this system leadership role should also include English health bodies (NHS trusts, NHS foundation trusts and CCGs, and in future ICBs.)

Further information on the proposals for system leadership is set out in section 5 of the consultation and it closes on 22 September 2021. Questions 13 and 14 specifically relate to health bodies and we encourage NHS bodies to give their views on these in particular, as well as into other relevant questions.

Impact of auditor value for money arrangements conclusions on audit certificates – 4 June 2021 (updated 27 August 2021)

NHS foundation trusts: laying of annual reports and accounts

From 2020/21, NHS local auditors will issue the ‘auditor’s annual report’, replacing the previous annual audit letter (not previously applicable to all NHS foundation trusts), which will include the auditor’s commentary on use of resources (value for money) arrangements. For NHS bodies this would usually be issued at the same time as the audit report containing the audit opinion on the accounts. For 2020/21, as part of the response to the coronavirus pandemic, the NAO has said that auditors at NHS trusts and NHS foundation trusts can issue the auditor’s annual report at a later point than the audit opinion on accounts, by 20 September.

When the auditor issues the audit report on the accounts (containing the audit opinion, and included within the annual report and accounts), this also includes a certificate that the auditor has completed their work. Where the auditor’s work on VFM arrangements is not complete at the time of issuing the opinion on the financial statements, or in some cases where the auditor is still drafting their auditor’s annual report, the audit certificate will not be issued at the same time as the audit opinion. This means that the audit report and certificate is not final, so the annual report and accounts (in which it is included) is also not final. Paragraph 1.10 of the FT ARM 2020/21 lists the required components of an FT’s annual report and accounts, and this incorporates the auditors’ report including certificate.

Therefore an NHS foundation trust cannot lay its annual report and accounts before Parliament until the auditor has issued the audit certificate. It is the Trust’s responsibility to ensure that its annual report and accounts document is complete. Paragraph 1.20 of the FT ARM explains that laying before Parliament must precede local publication.

For NHS foundation trusts able to lay their document before the summer Parliamentary recess, e-laying arrangements (i.e. no printed copies) are still in force. Arrangements for laying after the summer have not yet been communicated. We hope to set out the deadlines and arrangements for laying for FTs next week.

Guidance for NHS trusts

While NHS trusts do not lay their annual report and accounts before Parliament, NHS trusts are advised that their annual report and accounts document is not complete until the audit report (opinion) is accompanied by the audit certificate, as explained for NHS foundation trusts above.

Inclusion of the audit certificate in annual reports

Where later completion of the auditor’s use of resources work means the audit certificate is finalised at a later date than the true and fair audit opinion, we understand that the audit certificate will be issued as a separate document at that later date and both should be included within the annual report. The annual report will include the audit report (with audit opinion) at the original date, and the audit certificate signed at the later date. Please do not attempt to merge the two.

DHSC Group Accounting Manual (GAM) 2021/22 – 13 May 2021

The DHSC GAM for 2021/22 has been published and can be accessed at:

Special payments – 22 April 2021

Following this letter, organisations are reminded that proposed special payments that are either (i) above £95,000 and/or (ii) considered potentially novel, contentious or could cause repercussions elsewhere in the public sector, should be submitted for HM Treasury approval. Please contact with any queries over this process.

NHS Pension Scheme disclosure for 2020/21 accounts – 7 April 2021

The NHS Pension Scheme 2020/21 accounts disclosure note provided by NHS BSA is attached below. If your trust is using the optional accounts templates provided by NHS Improvement, changes from the version included in those templates are highlighted in red text. Please note:

  • The wording reflects that the actuarial valuation is currently not finalised. We will advise if this changes before local accounts sign off.
  • The final paragraph refers to a report to Government anticipated during April 2021. The disclosure uses wording assuming this has happened, to avoid needing to issue an updated version of the disclosure in April.
  • 2020-21 NHS Pension Account Disclosure v1.1

Year end accounting guidance for 2020/21 items – updated 26 March 2021

A third version of guidance on accounting for 2020/21 items has been issued. The main update is adding the process for communicating details of testing equipment. The trusts to which this applies received a listing from Provider Accounts on 26 March. The guidance in this document remains applicable for the 2021/22 year end.

2020/21 optional accounts templates, example accounting policies and illustrative standalone M12 TAC forms – 9 March 2021

Optional linked accounts templates (group and single entity), example NHS provider accounting policies and illustrative standalone TAC forms with accompanying draft completion instructions are now available to download from provider portals.

Accounting for additional employer pension contributions 2020/21 – 22 January 2021

The employer contribution rate for the NHS Pension Scheme increased from 14.38% to 20.68% from 2019/20, but NHS providers have continued to pay over at the old rate with the additional 6.3% being settled centrally on their behalf by NHS England. As was the case for 2019/20, in 2020/21, the full 20.38% needs to be reflected in local provider accounts, with notional income from NHS England being recognised for the 6.3% element.

For the purposes of accounts NHS England will again compute the full year 6.3% figure for each provider, extrapolating from data provided by NHS BSA at month 10. We will communicate this figure to providers and populate a validation in month 12 TAC schedules. Based on previous analysis, the impact of using an estimate in this way will be highly immaterial. In the rare circumstances that the estimate leads to a more significant difference for any particular provider, there is a process where entities can ask for the national figures to be updated. More details are available in the guidance document below.

IFRS 17 Insurance Contracts – 8 August 2019

IFRS 17 on insurance contracts (replacing IFRS 4) is expected to apply to the public sector from 2022. An insurance contract is defined as “a contract under which one party (the issuer) accepts significant insurance risk from another party (the policyholder) by agreeing to compensate the policyholder if a specific uncertain future event (the insured event) adversely affects the policyholder”.

IFRS 17 brings a number of changes to accounting compared to IFRS 4; a useful summary is available here. But the first step for HM Treasury and DHSC is to identify what contracts might be held that would fall under IFRS 17. It’s possible that there may be items currently considered as provisions or contingent liabilities which are in reality insurance contracts. There are a number of important parts of the definition (this list is not complete):

  • The compensation from the issuer to the policyholder could be in money or in-kind: for example fixing a broken machine
  • The future event is uncertain – which means at least one of the probability of the event occurring, when it will occur, or how much would be paid if it occurs.
  • The future event is specific to the insured party (e.g. flood damage to a building owned or used by the policyholder is specific to that party).
  • The risk around the future event existed for the policyholder before the agreement was made, and it is not financial risk such as a future change in an index.
  • Warranties provided in connection with the sale of goods and services are specifically excluded by the standard as they fall under IFRS 15. So for example we would see readmissions in the NHS as affecting IFRS 15 measurement, and not considered the provision of insurance. Employer pensions and insurance contracts where the entity is the policyholder are also excluded from IFRS 17.

We request that all NHS providers think about whether they are likely to have contracts which are likely to fall under IFRS 17, with the provider as the issuer (rather than the policyholder). If you do have, or have matters that you’re unsure about and would like to discuss further, please get in touch with us.

New accounting standards in 2018/19 – April 2019 (re-packaged December 2019)

The TAC Completion Instructions in 2018/19 contained additional annexes explaining how the disclosure requirements in IFRS 7 (upon adoption of IFRS 9) and IFRS 15 had been addressed in the TAC schedules, with additional guidance on considerations for local accounts. These are now (from December 2019) retained separately as a future reference for providers.

Central review of NHS standard contract for IFRS 15 – 29 January 2019

The Department of Health and Social Care has led on a project to provide a review of the main features of the NHS standard contract and how IFRS 15 thinking should be applied. Chapter 5 will be the most useful part of this, explaining key elements of the NHS standard contract. Please note that chapter 7 on disclosure requirements is very focused on the requirements of the standard, rather than considering materiality for the NHS. The disclosures in our TAC schedules are designed to meet the most relevant disclosure requirements of IFRS 15, as explained in the TAC Completion Instructions.

NHS England centralised inventory procurement – 26 February 2018

NHS England operates a national centralised system for purchasing high-cost medical devices and implants used in specialised services. These items are paid for by NHS England but physically held by providers until they are used. This stock is seen as being owned by NHS England and so is reflected in its Statement of Financial Position. NHS providers are reminded to ensure that they exclude this consignment stock from their inventory counts and it should not be included within providers’ balance sheets.