Corporate report

Financial statements

Published 12 September 2024

Applies to England and Wales

Departmental financial statements

Statement of Comprehensive Net Expenditure for the period ended 31 March 2024.

	Note	2023-24 £’000	2022-23 £’000
Other operating income	3.1	(777)	(2,422)
Total operating income		(777)	(2,422)
Staff costs	4.1	320,228	286,760
Purchase of goods and services	3.2	80,641	84,873
Depreciation, amortisation and impairment charges	3.2	27,213	20,333
Indemnity provision and payments for Indemnity including legal costs	3.2	(9,904)	(6,243)
Total operating expenditure		418,178	385,723
Net operating expenditure		417,401	383,301
Finance income: Interest	5	(26)	(40)
Finance expense: Finance Leases	6	1,036	1,127
(Profit)/Loss on disposal of non-current assets	3.2	(44)	217
Net expenditure for the year		418,367	384,605
Other comprehensive net expenditure
Items which will not be reclassified to net operating expenditure
Net (gain)/ loss on revaluation of property, plant and equipment		(21)	0
Comprehensive net expenditure for the year		418,346	384,605

Statement of Financial Position as at 31 March 2024

	Note	2023-24 £’000	2022-23 £’000
Non-current assets
Right-of-Use assets	10	60,938	65,079
Assets under construction	9	55,319	45,257
Intangible assets	8	83,071	68,442
Property, plant and equipment	7	18,634	17,834
Trade and other receivables	12	3,273	3,628
Total non-current assets		221,235	200,240
Current assets
Trade and other receivables	12	12,516	12,085
Cash and cash equivalents	11	22,871	22,310
Total current assets		35,387	34,395
Total assets		256,621	234,635
Current liabilities
Trade and other payables	13	74,228	65,309
Lease Obligations	13	5,074	5,649
Short-term provisions	14.1	636	999
Indemnity Fund	14.2	43,800	57,000
Total current liabilities		123,738	128,957
Non-current assets plus net current (liabilities)/ assets		132,883	105,678
Non-current liabilities
Lease Obligations	10	57,342	65,638
Long-term provisions	14.1	–	894
Total non-current liabilities		57,342	66,532
Net (liabilities)/ assets		75,541	39,147
Taxpayers’ Equity
General Fund	SoCTE	75,541	39,147
Total Equity		75,541	39,147

Simon Hayes
Chief Executive and Chief Land Registrar
30 August 2024

	Note	2023-24 £’000	2022-23£’000
Cash flows from operating activities
Net operating income/ (expenditure)	SoCNE	(417,401)	(383,301)
Adjustments for non-cash transactions:
Depreciation of property, plant and equipment	3.2	11,378	10,552
Amortisation of intangible assets	3.2	15,730	8,354
Impairment of non-current assets		518	1,427
(Increase)/ decrease in trade & other receivables		(1,769)	1,554
Increase/ (decrease) in trade & other payables		8,359	2,777
Release from general fund	14	845	–
Less movements not passing through the	10	21	23
Auditor’s remuneration	3.2	127	118
Change in Indemnity Fund	14.2	(10,882)	(8,082)
Change in Early Release and Other provisions	14.1	(412)	1,840
Use of Indemnity Fund Provision	14.2	(2,318)	(4,718)
Use of other provisions	14.1	(845)	–
Net cash inflow/ (outflow) from operating activities		(396,649)	(369,456)
Cash flows from investing activities
Purchase of tangible assets	7	(5,189)	(1,674)
Purchase of intangible assets	8, 9	(41,974)	(42,873)
Net cash inflow/ (outflow) from investing activities		(47,163)	(44,547)
Cash flows from financing activities
From the Consolidated Fund (Supply) – current year	SoCTE	451,332	414,304
Repayments of capital element of obligations under finance leases	10	(5,524)	(5,922)
Interest element of obligations under finance leases	6	(1,036)	(1,127)
Capital repayment of lessor leases in year	10	208	–
Interest received	5	26	40
Net financing		445,006	407,295
Net increase/ (decrease) in cash and cash equivalents in the period before adjustment for payments to the Consolidated Fund		1,194	(6,708)
Payments of amounts due to the Consolidated Fund		(633)	(2,197)
Net increase/ (decrease) in cash and cash equivalents in the period after adjustment for receipts and payments to the Consolidated Fund		561	(8,905)
Cash and cash equivalents at the beginning of the period	11	22,310	31,215
Cash and cash equivalents at the end of the period	11	22,871	22,310

Statement of changes in Taxpayers’ Equity for the period ended 31 March 2024

	Note	General Fund £’000	Total reserves £’000
Balance at 31 March 2022		2,622	2,622
Deemed Supply		31,214	31,214
Net Parliamentary Fund - drawn down		414,304	414,304
Comprehensive net expenditure for the year	SoCNE	(384,605)	(384,605)
Amounts paid to the Consolidated Fund	SoCF
Auditor’s remuneration	3.3
Income payable to the Consolidated Fund	13
Amounts payable to the Consolidated Fund for year	13
Balance at 31 March 2023		39,147	39,147
Balance b/f		39,147	39,147
Deemed Supply		22,310	22,310
Net Parliamentary Fund - drawn down		451,332	451,332
Comprehensive net expenditure for the year	SoCNE	(418,367)	(418,367)
Amounts paid to the Consolidated Fund	SoCF	(633)	(633)
Auditor’s remuneration	3.3	127	127
Reversal of Asset Impairment	10	3,179	3,179
Provision utilised/written back against AME	14	1,317	1,317
Income payable to the Consolidated Fund	13	(44)	(44)
Amounts payable to the Consolidated Fund for the year	13	(22,827)	(22,827)
Taxpayers’ Equity at 31 March 2024		75,541	75,541

Notes to departmental accounts

1. Statement of accounting policies

1.1 Basis of preparation

These financial statements have been prepared inaccordance with the Government Financial Reporting Manual (FReM) 2023-24 and comply with the Accounts Direction given by HM Treasury.

The accounting policies contained in the FReM follow International Financial Reporting Standards (IFRS), as adapted or interpreted for the public sector context. Where the FReM permits achoice of accounting policy, the accounting policy that has been judged to be the most appropriate to the particular circumstances of HM Land Registry for the purposesof giving a true and fair view has been selected.

HM Land Registry’s accounting policies have been applied consistently in dealing with items considered material in relation to the financial statements.In addition to the primary statements prepared under IFRS, the FReM also requires the department to prepare a Statement of Parliamentary Supply and supporting notes to show Outturn against Estimate in terms of net resource requirement and net cash requirement.

The department is legally obliged under the Land Registration Act 2002 to provide statutory services relating to land registration and there are sufficient reserves to support the department going forward. In common with other government departments, the future financing of the department’s liabilities is to be met by future grants of Supply and the application of future income, both to be approved annually by Parliament.It is therefore considered appropriate to prepare these accounts on a going concern basis.These accounts have been prepared under the Government Resource and Accounts Act 2000.

Accounting standards issued but not yet effectiveIFRS 17 Insurance Contracts replaced IFRS 4 from1 January 2023 for public sector organisations. In July 2023 HM Treasury issued the draft implementation guidance for the public sector. It expects implementation to be from 2025-26, with early adoption allowed in select cases. HM Land Registry does not anticipate any accounting impact as HM Land Registry has no such Insurance contracts.

1.2 Accounting convention

The financial statements have been prepared on an accruals basis under the historical cost convention modified for the revaluation of Property, Plant and Equipment, Investment Properties, Assets Held for Sale and Intangible Assets to fair value as determined by the relevant accounting standard.

1.3 Areas of significant estimate and judgements 

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believedto be reasonable under the circumstances. The estimates and judgements that had a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the accounting period are:

• Note 8 - The valuation and useful economic life (UEL) of the intangible assets. The valuation is the direct replacement cost of the register and the data that is currently in use. The replacement cost includes all costs that are reliably measured and the economic life is reviewed each financial year to determine whether events and circumstances continue to support the life chosen.

• Note 14.2 - estimation of the provision required to settle all known and Incurred But Not Reported(IBNR) indemnity claims - where uncertainty exists for the proportion of outstanding claims that will ultimately be paid, the value of those payments and the effect of any legal judgements. For IBNR claims, the number of unreported claims is unknown as is the point at which an error is discovered and the value of any potential claim.

• Note 14 - In 2023-24, HM Land Registry removed the Covid contingency reserve from the indemnity revaluation, which alongside the latest HM Treasury Public Expenditure Systems (PES) discount ratesfor provisions, and latest claims data combined to decrease the Government Actuary Department’s valuation of HM Land Registry’s indemnity provision by £13.2m. The change in PES rates are inflation linked and the use of them is mandated by HM Treasury. This change in value reflects an accounting adjustment resulting from the effect on inflation discounting of this long-term liability and does not reflect any change in risk for the indemnity provision. The PES rate element accounts for £4.0m of this year’s reduction in value (2022-23: £12.7m).

1.4 Income from contracts with customers

IFRS 15 Revenue from Contracts with Customers has been adopted. The income recognition criteria within IFRS 15 are consistent with HM Land Registry accounting policy. All Statutory fees and charges are held in a separate HM Land Registry Trust Statement. Income in the Statement of Net Expenditure relates to property rental income which is recognised as the amounts fall due.

1.5 Operating segments

HM Land Registry’s operating segments are the directorates which are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker (CODM). The five reportable business segments are: Chief Executive and Chief Land Registrar’s Directorate, Corporate Services, Customer and Strategy, Data and Register Integrity, and Service Delivery Group.This is based on the group’s internal organisation and management structure, and is the primary way inwhich the CODM is provided with financial information. The CODM of HM Land Registry is Simon Hayes, Chief Executive and Chief Land Registrar.

1.6 Employee benefits

The cost of providing employee benefits is recognised in the period in which HM Land Registry receives services from its employees, rather than when it is paid or payable. Short-term employee benefits are recognised as an expense in the period in which the employee renders the service. Performance payments are recognised only when there is a legal or constructive obligation to pay them and the costs can be reliably estimated. Termination benefits are recognised when it can be demonstrated that there is an irreversible agreement to terminate the employment of employee(s) before the schemes’ retirement date or as a result of an offer to encourage voluntary redundancy.

1.7 Pensions

HM Land Registry employees are civil servants who are entitled to be members of the Principal Civil ServicePension Scheme (PCSPS) or the Civil Servant and Others Pension Scheme (CSOPS) – known as alpha. These are unfunded multi-employer defined benefit schemes, but HM Land Registry is unable to identify its share of the underlying assets and liabilities on a reasonable and consistent basis. HM Land Registry has therefore accounted for contributions and payments to these schemes under International Accounting Standard (IAS)19 Employee Benefits as if they were defined contribution schemes. Liability for the payment of future benefits is a charge on the PCSPS or alpha scheme.

1.8 Property, plant and equipment

Freehold and leasehold land and buildings are professionally valued by external, independent property valuers having appropriate recognised professional qualifications and recent experience in the location and category of the properties being valued. Montagu Evans (Royal Institution of Chartered Surveyors (RICS) registered valuer) carried out a desktop valuation in March 2021to facilitate the transfer of assets to the Government Property Agency.

HM Land Registry is required by the FReM to disclose non-current assets in the Statement of Financial Position at fair value. For assets in use the FReM requires operational assets to be measured at fair value using current value in existing use, rather than market value as required by IAS 16 Property Plant and Equipment. Details of FReM adaptations which continue to apply for 2023- 24 can be found on GOV.UK (search ‘Financial Reporting Manual 2023-24’).

For short-life non-property assets, historical cost is used as an approximation to the fair value of the asset.Freehold land and buildings and leasehold buildings are included at revaluation less accumulated depreciation and impairment losses.

All other tangible non-current assets are included at historical cost less accumulated depreciation and impairment losses.

Assets in the course of construction are not depreciated. For other assets the depreciation charge is calculated so as to allocate the cost or revalued amount, less the estimated residual value, of non-current assets systematically over their remaining useful lives using the straight-line method.

Other property, plant and equipment includes IT and office equipment and machinery. HM Land Registry capitalises expenditure over £2,500 for an individual asset. Where appropriate, individual assets falling below the minimum value for capitalisation are grouped. It is HM Land Registry’s policy not to capitalise expenditure on fixtures or fittings, principally office furniture, as they are not considered material.

Asset lives are reviewed at the end of each financial year.

The following asset depreciation rates are used:

Freehold land	Nil
Freehold buildings	Estimated useful life
Leasehold buildings	Period of the lease or estimated useful life
Telecommunications equipment	5 years
Office equipment	5 years
Computers: Mainframe	3 to 10 years
Computers: PCs	5 years
Structured cabling	10 years
Plant and heavy machinery	10 years

1.9 Leases

HM Land Registry accounts for the majority of its leases under IFRS 16 Leases, with the costs, depreciation and other associated disclosure being in Note 10.

These assets and liabilities exclude those that have a lease with a short-life (i.e. less than 12 months), or are considered ‘low-value’ under IFRS 16. HM Land Registry holds a single lease which it defines as low value, currently valued at £6k. For this particular lease, the low value criteria is appropriate as it relates to a very small sub-lease within a much larger government property.

Initial recognition

At the commencement of the lease, HM Land Registry recognises a right-of-use asset and a lease liability.

The lease liability is measured at the payment for the remaining lease term (as defined above), net of irrecoverable value added tax, discounted either by the rate implicit in the lease, or (where this cannot be determined), HM Land Registry’s central internal rate

of borrowing. The payments included in the liability are those that are fixed, or in substance fixed, excluding charges arising (i.e. from future rent reviews or indexation). The right-of-use asset is measured at the value of the liability, adjusted for: any payments made or amounts accrued before the commencement date; lease incentives received; incremental costs in obtaining the lease; and any disposal costs at the end of the lease.

Subsequent measurement

The right-of-use assets are measured using the cost model. The liability is adjusted for interest repayments.

Lease expenditure

Expenditure includes interest, straight-line depreciation and any asset impairments and any changes in variable lease payments not included in the measurement of the liability during the period in which the triggering event occurred. Lease payments are debited against the liability. Rental payments for leases where the term is 12 months or less, or where the lease is classified as low-value are expensed.

Borrowing rate

HM Land Registry uses an HM Treasury discount rate as its incremental borrowing rate. HM Treasury’s PES (2023) 10 paper states that the incremental borrowing rate (a nominal rate) for leases commencing after December 2023 is 4.72% (2022: 3.51%).

1.10 Intangible assetsIntangible assets are stated at historical cost less accumulated amortisation and accumulated impairment losses as a proxy for fair value, since no active market exists for the Department’s intangible assets. This treatment is also known as Depreciated Replacement Cost.

Annual review of Useful Economic Life (UEL) of Intangible Assets

In 2023-24, HM Land Registry performed its annual review of the UELs of Intangible Assets in accordance with IAS 38 Intangible Assets. HM Land Registry’s review used both internal indicators and also benchmarked its UELs against those used in comparable organisations within the public sector. No changes were made to HM Land Registry’s UELs in 2023-24.

Bespoke internally developed software	10 years
Data assets	15 years

Local Land Charges

HM Land Registry completed the building and development of a computerised register to hold the Local Land Charges data in July 2018. As of 31 March 2024, the data relating to 96 Local Authorities have been added to the register and are in use (2022-23: Seventy four Local Authorities).Under IAS 38, development costs have been capitalised for two separate assets: a database to hold the information; and the data itself, which needs to be cleansed, digitised and migrated to this database.Following commencement of the register service, these components are amortised over their respective useful lives of:

Local Land Charges register	10 years
Local Land Charges data	15 years

Software and software licences

Separately acquired intangible assets are shown at historical cost. The costs incurred to acquire and bring these assets to use are capitalised. These include contractors’ charges, materials, directly attributable labour and directly attributable overhead costs.Software licences are included at cost less accumulated amortisation. They are amortised on a straight-line basis at a rate of:

Mainframe software	5 years
Software system	10 years
Software licences	As per licence agreements

HM Land Registry’s approach to software development is set-out in Note 1.12.

E-security, portal and Business GatewayThe E-security, Portal and Business Gateway assets had all been fully amortised by the start of the financial year, but are included in the accounts as they are still in use.

1.11 Assets Under Construction

All Assets Under Construction (AUC) are held at cost. HM Land Registry recognises four categories of AUC: Tangible-Other, Intangible - Local Land Charges, Intangible - Transformation Digital, and Intangible - Other.

These classes of asset relate to the capitalisation of Local Land Charges costs during the year, case managementimprovements, mainframe to cloud-based migration and digital mortgage.Intangibles other - Software development costsIn accordance with IAS 38, expenditure incurred on developing new IT infrastructure (covering third-party costs and the direct costs of in-house staff effort) are capitalised.

Development costs that are directly attributable to the design and testing of identifiable and unique software products controlled by HM Land Registry are recognised as intangible assets when the requirements of IAS 38 are met.

Directly attributable costs that are capitalised as part of the software product include the software development employee costs and an appropriate portion of relevant overheads.

Other development expenditure that does not meet these criteria is recognised as an expense as incurred. Development costs previously recognised are not recognised as an asset in a subsequent period.All research expenditure is written off as incurred.Expenditure incurred in software development is recorded as an intangible asset under construction and is then transferred into use as an intangible asset once that software and associated data is made available by HM Land Registry to its customers (either as part of the Local Land Charges Programme or Other).

Software development costs are categorised as ‘assets under construction’ within Note 9.Intangibles - Local Land ChargesHM Land Registry is working with various Local Authorities to transfer their land charges data to HM Land Registry’s digital platform.Transformation Digital AssetsDigital software assets developed from work within HM Land Registry’s Corporate Services.

Tangible - otherThis area reflects other HM Land Registry workstreamsincluding the development of IT infrastructure.

1.12 Impairment of non-current assets

Impairment reviews are undertaken at each year-end and if there are indications that the asset has suffered an impairment loss a charge is reflected in the Statement of Comprehensive Net Expenditure in the year in whichit occurs. If the asset is carried at a revalued amount, the impairment loss is treated as a revaluation decrease, to the extent of the revaluation reserve that relates to the asset, with any excess in the Statement of Comprehensive Net Expenditure. Currently, HM Land Registry has £0.0m in its revaluation reserve. If any such indication exists,the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. Therecoverable amount is the higher of fair value less costs to sell and value in use.For assets under development, an annual review is undertaken to confirm that these assets still meet the measurement criteria within IAS 38 Intangible Assets.

1.13 Trade receivables

Trade receivables do not carry any interest and are stated at their transaction price as reduced by appropriate allowances for irrecoverable amounts. These impairment provisions are recorded in administrative expenses within the Statement of Comprehensive Net Expenditure.

The carrying amount of trade receivables is deemed to be an approximation of fair value.

If collection of amounts receivable is expected in one year or less they are classified as current assets. If not, they are presented as non-current assets.

1.14 Cash and cash equivalents

Cash represents cash-in-hand and cash held with the Government Banking Service (GBS).

1.15 Trade payables

Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are stated at transaction price. The carrying amount of trade payables is deemed to be an approximation of fair value.

Accounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities.

1.16 Provisions

HM Land Registry provides for legal and constructive obligations that are of uncertain timing or amount at the Statement of Financial Position date, on the basis of management’s best estimate at that date of the expenditure required to settle the obligation. As the effect of discounting is immaterial, it is included as part of the revaluation to that provision in year, rather than disclosed on a separate line. Provisions are chargedto the Statement of Comprehensive Net Expenditure and recorded as liabilities in the Statement of FinancialPosition. (Further details, including sensitivities, are given in Note 14).

1.17 Indemnity Fund

Schedule 8 to the Land Registration Act 2002 requires HM Land Registry to indemnify third parties against loss caused by mistakes in the register, mistakes in search results and loss of documents by HM Land Registry.

Most of HM Land Registry’s indemnity claims arise as a result of mistakes in the register, and some of thesemistakes are the result of forgery of documents such as charges. Indeed fraud/forgery usually accounts for the largest share of indemnity payments, and this year is no exception. Under Schedule 8 to the Act, HM Land Registry has statutory rights to recover these payments from third parties, where it is the case that third parties are at fault, either wholly or partly, for the loss.

As at the current accounting date, future claim payments are uncertain in timing and amount. The IndemnityFund is established on the basis of the best estimate of the expenditure required to settle the obligation. TheIndemnity Fund is determined after considering actuarial estimates of the cost of claims reported but not settled, as well as claims incurred but not reported. The estimated cost of claims includes expenses incurred in settling these claims.

The carrying amount of the Indemnity Fund is derived from critical judgements, estimates and assumptions based upon historical experience and other factors which are considered to be relevant. These estimates and underlying assumptions are reviewed on a quarterlybasis by HM Land Registry, supported by its independent actuary, the Government Actuary’s Department (GAD).

After the accounting date, a further review of claims received by HM Land Registry (up to the date the Accounting Officer approves the Annual Report and Accounts) is made to see if the indemnity fund is still appropriately valued. Provided in these accounts are the likely settlement values of current and future claims against the Indemnity Fund. Further details of the Indemnity Fund are shown in Note 14.2 of this report.

1.18 Contingent liabilities

Where appropriate, liabilities that have only a possible chance of crystallising and do not meet the provisions criteria have been classified as contingent liabilities. This includes, but is not limited to, claims for losses arising from errors, or fraud in relation to HM Land Registry’s statutory responsibilities as insurer of titles in England and Wales (see Note 15).

1.19 VAT

HM Land Registry accounts for VAT on its statutory activities under HM Treasury’s Taxing and Contracting Out of Services Directions. For non-statutory activity - which is business activity - VAT is charged and recovered according to commercial VAT rules. Irrecoverable VAT is charged to the relevant expenditure category or included in the capitalised purchase costs of non-current assets. Where output tax is charged or input tax is recoverable the amounts are stated net of VAT.

2. Operating segments

2.1 Statement of Operating Expenditure by Operating Segment

2023-24	Business as Usual £’000	Central Costs £’000	Projects £’000	Total Expenditure £’000
Chief Executive & Chief Land Registrar Directorate	3,928	–	–	3,928
Customer & Strategy Group	10,219	–	–	10,219
Data & Register Integrity Group	23,563	2,281	–	25,844
Service Delivery Group	247,241	–	2,453	249,694
Corporate Services	71,444	30,145	27,095	128,684
Total	356,395	32,426	29,548	418,369
2022-23
Chief Executive & Chief Land Registrar’s Directorate	3,855	–	–	3,855
Customer & Strategy Group	8,778	–	–	8,778
Data & Register Integrity Group	21,204	(6,695)	–	14,509
Service Delivery Group	221,131	–	6,853	227,984
Corporate Services	68,197	37,894	23,388	129,479
Total	323,165	31,199	30,241	384,605

Operating Segments are determined in accordance with IFRS 8 Operating Segments based on what information is presented for decision making purposes to the Chief Operating Decision Maker (CODM). The CODM for HM Land Registry is the Accounting Officer.

The structure of HM Land Registry means that materially all of the assets included in the Statement of Financial Position are used for general administration and benefit of HM Land Registry as a whole. Consequently, they are not apportioned to operating segments in the table above.

The reportable segments changed in 2023-24, so the 2022-23 have been restated accordingly.

The description for each operating segment is stated below:

Chief Executive and Chief Land Registrar’s Directorate 

We protect the reputation of HM Land Registry on behalf of the Chief Executive and Chief Land Registrar, building relationships with our stakeholders, including other parts of government.

Customer & Strategy Group

The purpose of the Customer and Strategy Group is to help set the direction of the organisation and represent the voice of the customer, bringing together customer insight and knowledge of our external environment to shape and adjust our direction as needed.

Data & Register Integrity Group

We protect the integrity of the register, ensuring we have the rules, orders, directions and notices in place to operate effectively.

Service Delivery Group

The Service Delivery Group’s main function is to register land and provide a high quality and sustainable level of service to our customers, measured against a set of key performance indicators.

Corporate ServicesCorporate Services is made up of the following segments:

Finance and Business Services (FaBS)

The FaBS directorate includes Facilities Management, Finance, Internal Audit, Commercial Group, Strategic Planning and Performance, and Insight, Data, Evidence and Analytical Support.

Human Resources & Organisation Development (HR&OD)

Human Resources & Organisation Development works to help HM Land Registry deliver its operational and organisational priorities, and build organisational capacity and capability to meet new challenges.

Transformation & Technology

We are responsible for providing high quality, resilient and secure services and systems, alongside delivering effective changes across HM Land Registry – from transformational programmes.

Expenditure streams

The expenditure streams are split into three categories: Business as Usual (BAU); Central Costs; and Projects.

This division is designed to show the costs of running the directorate (BAU), additional tasks being completed by directorate (projects), and to separate out the central running costs for HM Land Registry (central costs).

Central costs

This category includes items such as staff leave accruals, property costs, depreciation, amortisation, provisions, and impairments which are monitored by a single directorate but could be apportioned across the business. Below are explanations relating to the most significant variances arising in the Central Costs category.

Variance between Note 2. Operating Segments and Statement of Net Comprehensive Expenditure

The operating segments shown above are presented net of revenue (see Note 3).

3.1 Operating Income

	Note	2023-24 £’000	2022-23 £’000
Income from sale of goods and services	(777)	(2,422)
Total operating income	(777)	(2,422)

3.2 Other costs

Cash items	Note	2023-24 £’000	2022-23 £’000
IT & Professional services		29,870	30,443
Accommodation costs		14,040	15,752
Other staff costs including training		11,089	10,938
Survey and scanning costs		4,597	5,462
File store costs		4,533	5,330
Local Land Charges transition & burden payments		3,473	3,922
Hire of machinery		2,989	3,147
First-tier Tribunal costs		3,250	3,082
Postage and Printing costs		1,793	1,905
Office maintenance		1,552	980
Telecommunication costs		1,438	1,225
Advertising and marketing		879	998
Charge for operating leases - buildings	10	5	7
Other costs		962	1,782
Total cash expenditure		80,470	84,973
Non-cash items
Indemnity provision and payments for Indemnity including legal costs	14	(10,882)	(8,082)
Other provision movements		978	1,840
Depreciation of tangible non-current assets – owned	7	5,853	6,363
Depreciation of tangible non-current assets – leased	10	5,525	4,189
Amortisation of intangible assets	8	15,730	8,354
Impairment in value of non-current assets		106	1,427
Auditor’s remuneration – audit fee	3.3	127	118
Total non-cash expenditure		17,437	14,208
Total Other Costs		97,907	99,181

3.3 Auditor’s Remuneration

Auditor’s Remuneration is a notional fee in both financial years paid through the Supply Process, which is broken down as follows:

	2023-24 £’000	2022-23£’000
Audit of Resource Accounts	100	95
Audit of Trust Statement Accounts	27	23
Total notional fee	127	11

4. Employee information

4.1. Staff costs

			2023-24			2022-23
	Permanent staff £’000	Others £’000	Total £’000	Permanent staff £’000	Others £’000	Total £’000
Salaries	235,408	1,463	236,871	210,748	471	211,219
Social security costs	25,915	141	26,056	22,786	42	22,828
Other pension costs	56,973	328	57,301	52,667	46	52,713
	318,296	1,932	320,228	286,201	559	286,760

4.2 Staff numbers

The average number of persons employed (full-time equivalent) by HM Land Registry during the year was made up as follows:

			2023-24			2022-23
	Permanent staff	Others	Total	Permanent staff	Others	Total
Senior management	6	-	6	5	–	5
Operations	4,946	4	4,950	4,845	2	4,847
Head Office	537	7	544	955	15	970
Digital, Data and Technology	739	25	764	564	5	569
	6,228	36	6,264	6,369	22	6,391

4.3

The salary and pension entitlements of the Chief Executive and the Directors of HM Land Registry are included in the Remuneration report on pages 64 to 66.The staff costs in Note 4.1 do not include those staff costs capitalised as part of the building of intangible assets.During 2023-24 £12.7m (2022-23: £11.2m) of staff costs was capitalised in the construction of these intangible assets.

4.4 Pensions

The Principal Civil Service Pension Scheme (PCSPS) and the Civil Servant and Others Pension Scheme (CSOPS) – known as alpha – are unfunded multi-employer defined benefit schemes but HM Land Registry is unable to identify its share of the underlying assets andliabilities.

The scheme actuary, the Government Actuary’s Department (GAD), valued the PCSPS as at 31 March 2024, with the report published on 19 December 2023. You can find details in the resource accounts of the Cabinet Office: Civil Superannuation.For 2023-24, employers’ contributions of £57.0m were payable to the PCSPS (2022-23 £52.7m) at one of four rates in the range 26.6% to 30.3% of pensionable earnings, based on salary bands.The Scheme Actuary reviews employer contributions usually every four years following a full scheme valuation.

The contribution rates are set to meet the cost of the benefits accruing during 2023-24 to be paid when the member retires and not the benefits paid during this period to existing pensioners.

Employees can opt to open a partnership pension account, a stakeholder pension with an employer contribution. Employers’ contributions of £0.3m were paid to one appointed stakeholder pension provider. Employer contributions are age-related and ranged from 8.0% to 14.75%.

Employers also match employee contributions up to 3.0% of pensionable earnings. In addition, employer contributions of £9,310, 0.5% of pensionable pay, were payable to the PCSPS to cover the cost of the future provision of lump sum benefits on death in service or ill- health retirement of these employees.Contributions due to the partnership pension providers at the balance sheet date were £0.03m.

Contributions prepaid at that date were £0.0m.Seven individuals retired early on ill-health grounds; the total additional accrued pension liabilities in the year amounted to £51,461.25 (2022-23: £20,491).

Further information relating to pension arrangements can be found in the Remuneration report on pages 66 to 67 and Note 1.7.

5. Finance income

	2023-24 £’000	2022-23 £’000
Interest received on leases	26	40
	26	40

6. Finance expense: Finance leases

	2023-24 £’000	2022-23 £’000
Interest on obligations under finance leases	1,036	1,127
	1,036	1,127

7. Property, plant and equipment

	Plant and equipment
Cost or valuation	IT-related assets £’000	Other plant and equipment £’000	Total £’000
At 1 April	87,754	2,320	90,074
Additions	5,189	–	5,189
Assets brought into use	–	823	823
Revaluation	–	–	–
Reclassification of assets	–	–	–
Impairment	–	–	–
Disposals	(1,889)	–	(1,889)
Transferred from assets held for sale	–	–	–
At 31 March	91,054	3,143	94,197
Accumulated depreciation
At 1 April	70,055	2,183	72,238
Charged in year	5,849	4	5,853
Revaluation	–	–	–
Reclassification of assets	(655)	–	(655)
Disposals	(1,873)	–	(1,873)
Transferred from assets held for sale	–	–	–
At 31 March	73,376	2,187	75,563
Carrying amount at 31 March	17,678	956	18,634

8. Intangible assets

8.1 2023-24

Cost or valuation	E-security, portal and Business Gateway £’000	Local Land Charges £’000	Software and software licences £’000	Total £’000
At 1 April 2023	27,424	32,258	92,203	151,885
Additions	–	1	2,155	2,156
Assets brought into use	–	4,595	24,292	28,887
Disposals	–	–	(1,407)	(1,407)
At 31 March 2024	27,424	36,854	117,243	181,521
Amortisation
At 1 April 2023	27,424	13,246	42,774	83,444
Charged in year	–	1,878	13,852	15,730
Reclassification of assets	–	–	655	655
Revaluation	–	–	–	–
Disposals	–	–	(1,379)	(1,379)
At 31 March 2024	27,424	15,124	55,902 98,450
Carrying amount at 31 March 2024	–	21,730	61,341	83,071

Cost or valuation	E-security, portal and Business Gateway £’000	Local Land Charges £’000	Restated: Software and software licences £’000	Total £’000
At 1 April 2022	27,424	25,407	69,810	122,641
Additions	–	–	309	309
Assets brought into use	–	6,851	23,536	30,387
Disposals	–	–	(1,452)	(1,452)
At 31 March 2023	27,424	32,258	92,203	151,885
Amortisation
At 1 April 2022	27,424	10,134	38,914	76,472
Charged in year	–	3,112	5,247	8,359
Disposals	–	–	(1,387)	(1,387)
At 31 March 2023	27,424	13,246	42,774	83,444
Carrying amount at 31 March 2023	–	19,012	49,429	68,441

See Note 1.10 for details of the intangible assets accounting policy.

9. Assets under construction

	Tangibles			Intangibles
2023-24	Other assets £’000	Local Land Charges £’000	Restated: Transformation Digital Assets £’000	Total £’000
At 1 April 2023	1,247	20,159	23,850	45,256
Additions	30	17,588	22,200	39,818
Brought into use	(823)	(4,595)	(24,292)	(29,710)
Impairment	–	(45)	–	(45)
Reclassification of Assets	19	–	(19)	–
Carrying amount at 31 March 2024	473	33,107	21,739	55,319
2022-23	1,557	10,275	23,458	35,290
At 1 April 2022	480	16,344	25,740	42,564
Additions	(790)	(6,460)	(23,927)	(31,177)
Brought into use	0	0	(1,421)	(1,421)
Impairment	1,247	20,159	23,850	45,256
Carrying amount at 31 March 2023	1,247	20,159	23,850	45,256

See Note 1.12 for details of the impairment accounting policy.

In 2023-24, all intangible assets under construction projects were reclassified as either Digital Transformation or Local Land Charges projects.

10. Leases

10.1 Quantitative disclosures around right-of-use assets

	Buildings 2023-24 £’000	Buildings 2022-23 £’000
Right-of-use assets: Buildings Cost
At 1 April	79,374	76,339
Additions	1,532	8,108
Remeasurement	21	(5,073)
Derecognition	(2,455)	–
At 31 March	78,472	79,374
Right-of-use assets: Buildings Depreciation
At 1 April	(11,719)	(6,867)
Depreciation Expense	(5,740)	(4,852)
Derecognition	818	–
At 31 March	(16,641)	(11,719)
Carrying amount at 31 March	61,831	67,655

The value of HM Land Registry’s right-of-use assets and depreciation charge are offset by its lessor accounting as follows:

	£’000	£’000
Reduction in asset value due to lessor accounting
Opening balance	(2,576)	(3,239)
Additions	(12)	–
Disposals	1,865	–
Remeasurement	28	–
Depreciation offset - Current Year	215	663
Accumulated Depreciation on Disposals	(413)	–
Closing asset value	(893)	(2,576)
Total value of HM Land Registry’s right-of-use assets	60,938	65,079

10.2 Quantitative disclosures around lease liabilities

Maturity analysis		2023-24 £’000	2022-23 £’000
Buildings - Right of use
Within one year		5,074	5,251
In the second to fifth years inclusive		19,712	19,996
After five years		37,630	42,692
Total minimum lease payments		62,416	67,939
Buildings - Non-right of use
Within one year		–	398
In the second to fifth years inclusive		–	2,243
After five years		–	706
Total minimum lease payments		–	3,347
Current		5,074	5,649
Non-current		57,342	65,638
Total		62,416	71,287

10.3 Quantitative disclosures around elements in the Statement of Comprehensive Net Expenditure

Amounts recognised in the Statement of Comprehensive Net Expenditure	2023-24 £’000	2022-23 £’000
Finance Income: Interest received on leases	(26)	(40)
Depreciation	5,740	4,852
Finance Charges: Interest on obligations under finance leases	1,036	1,127
Low value and short term leases	5	7
	6,755	5,946

10.4 Quantitative disclosures around cash outflow for leases

Amounts recognised in the Statement of Cash Flows	2023-24 £’000	2022-23 £’000
Repayment of leases in year - Lessor	(5,524)	(5,922)
Finance Charges: Interest on obligations under finance leases	(1,036)	(1,127)
Repayment of leases in year - Lessee	208	577
Finance Income: Interest received on leases	26	40

10.5 HM Land Registry as lessor

At 31 March the future minimum lease payments under non- cancellable leases are receivable as follows:

	2023-24 £’000	2022-23 £’000
Within one year	269	446
In the second to fifth years inclusive	445	1,476
After five years	315	832
	1,029	2,754

11. Cash at bank and in hand

	2023-24	2022-23
	£’000	£’000
Balance at 1 April	22,310	31,214
Net change in cash balances	561	(8,904)
Balance at 31 March	22,871	22,310
The balance at 31 March was held at
Government Banking Service	22,871	22,310
Balance at 31 March	22,871	22,31

HM Land Registry’s financial assets are bank balances and cash, and trade and other receivables, which represent the maximum exposure to credit risk in relation to financial assets. The credit risk is primarily attributable to trade and other receivables and is spread over a large number of customers. The amounts presented in the Statement of Financial Position are net of allowances for doubtful receivables, estimated by management based on past experience and an assessment of the current economic climate.

HM Land Registry’s bank balances are held with the Government Banking Service.

12. Trade and other receivables

12.1 Current assets

	2023-24 £’000	2022-23 £’000
Trade receivables	–	–
Other receivables	1,694	1,367
Right-to-Use: Repayment in year	(207)	(577)
Prepayments and accrued income	10,608	10,306
	12,095	11,096
Right-to-Use: Debtors	421	989
	12,516	12,085

The ‘Right-to-Use: Repayment in year’ is correctly included in the ‘Receivables’ note. This is because when the lessees make payment, this balance decreases, which off-set against the ‘Right-to-Use: Debtors’, so these should be presented together to provide a complete understanding of the underlying transactions.

The average credit period taken on provision of services is 3.1 days (2022-23: 4.7 days). No interest is charged on the receivables. Rents receivable are received and accounted for in advance of the occupancy period and the likelihood of non-collection of rents and credit risk exposure have both been determined as insignificant in terms of overall risk, with these assessments unchanged in light of the impact of COVID-19.

12.2 Non-current assets

	2023-24	2022-23
	£’000	£’000
Right-to-Use debtors	701	2,196
Other receivables	37	51
Prepayments and accrued income	2,535	1,381
	3,273	3,628

The carrying amounts of trade and other receivables are deemed to be an approximation of their fair values.

13. Trade and other payables

13.1 Current

		2023-24 £’000	2022-23 £’000
	Notes
Trade payables		3,287	2,033
Taxation and social security		6,339	5,726
Other payables		9,279	4,840
Accruals		32,452	30,399
Consolidated Fund Extra Receipts (CFER) Income due to the Consolidated Fund	11	44	284
Amounts issued from the Consolidated Fund for Supply but not spent at 31 March	11	22,827	22,026
		74,228	65,308
Lease obligations	10	5,074	5,649
		79,302	70,957

The average credit period taken for trade purchases is 5.7 days (2022-23: 6.1 days). The carrying amounts of trade payables are deemed to be an approximation of their fair values.

13.2 Non-current

	Notes	2023-24 £’000	2022-23 £’000
Lease Obligations	10	57,342	65,638
		57,342	65,638

14 Provisions for liabilities and charges

14.1 Early release schemes and other

			2023-24				2022-23
	Early retirement & other £’000	Dilapidations £’000	Total £’000		Early retirement & other £’000	Dilapidations £’000	Total £’000
At 1 April	53	1,840	1,893		53	–	53
Provided in the year	–	61	61		–	1,840	1,840
Revaluation of provision	–	–	–		–	–	–
Provision utilised in the year	(2)	(843)	(845)		–	–	–
Provision written back unused	-	(473)	(473)		–	–	–
At 31 March	51	585	636		53	1,840	1,893
Included in current liabilities	51	585	636		53	946	999
Included in non-current liabilities	–	–	–		–	894	894
	51	585	636		53	1,840	1,893

The early retirement provision (ERP) gives retirement benefits to certain employees. These benefits conform to the rules of the Principal Civil Service Pension Scheme (PCSPS). HM Land Registry bears the cost of these benefits until the normal retirement age of the employees retired under the scheme. The total pension liability up to normal retiring age in respect of each employee is charged to the Statement of Comprehensive Income in the year in which the employee takes early retirement and a provision for future pension payments is created.

Pension and related benefit payments to the retired employee until normal retiring age are then charged annually against the provision.

Total payments in the year amounted to £0.0m, and £0.0m had been provided for within the ERP provision in the 2023-24 accounts (2022-23: Payments £0.0m and Provision of £0.0m).

Dilapidation provision

Dilapidation provisions are recognised where HM Land Registry has sufficient assurance that they will have to undertake works at the end of a lease to return the building to the state it was in when the lease commenced.

Early retirement and other provisions

Early retirement and other provisions reflect future costs for which HM Land Registry is liable, where the obligating event has already occurred, but for which the timing and value remain uncertain.

14.2 Indemnity Fund

The Land Registration Act 2002 places a legal liability on HM Land Registry to indemnify against losses resulting from errors or omissions in the register of title. This includes errors resulting from frauds perpetrated by third parties. As a statutory insurer of titles in England and Wales, indemnity payments are not confined to mistakes made by HM Land Registry. HM Land Registry provides for these claims under its Indemnity Fund both for known claims and claims incurred but not reported (IBNR).

		2023-24				2022-23
Outstanding Provision £’000	IBNR Provision £’000	Total £’000	Outstanding Provision £’000	IBNR Provision £’000	Total £’000
At 1 April	12,200	44,800	57,000	7,600	62,200	69,800
Provided in the year	2,318	–	2,318	4,718	–	4,718
Provisions utilised in the year	(2,318)	–	(2,318)	(4,718)	–	(4,718)
Claims revaluation	(3,400)	–	(3,400)	4,600	–	4,600
IBNR revaluation	–	(9,800)	(9,800)	–	(17,400)	(17,400)
At 31 March	8,800	35,000	43,800	12,200	44,800	57,000

Following the actuarial review by the Government Actuary’s Department (GAD), the fund in respect of reported but not settled claims (Outstanding Provision) has decreased in 2023-24 by £3.4m (2022-23: £4.6m increase). The provision for claims incurred but not reported (IBNR Provision) has decreased in 2023-24 by £9.8m (2022-23: £17.4m decrease).

The £13.2m decrease in the provision is driven by changes in the HM Treasury mandated Public Expenditure System (PES) discount rates and updating the data in the model to account for claims experience during the year.

Management has also removed the contingency reserve recognised during COVID; this had a £2.0m impact. If inflation moves as predicted by the Bank of England, the valuation may swing higher in future years.

The Outstanding Provision for claims received but not yet settled is an estimate and as it involves projecting future payments, the final amounts paid on these claims is uncertain. The main uncertainties are:

• the proportion of outstanding claims that will ultimately be paid;
• the value of the payments made; and
• the effect of any legal judgements.

The presence of large outstanding claims can add significantly to this uncertainty.The IBNR Provision is greater and inherently more uncertain than the Outstanding Provision. Unlike the Outstanding Provision, which is based on existing claims information, the IBNR Provision covers potential claims that may be made as a result of errors that have already been introduced into the register as a result of day-to- day update activity (either through fraud and forgery or administrative error).

The main uncertainties within the IBNR Provision are:

• the number of unreported errors currently within the register is unknown;
• at what point in the future these errors will be discovered and claims made; and
• how much the cost of the corresponding claims will be.

Claims can take many years to be reported and subsequently settled.

In estimating the IBNR Provision, the actuary projects the number and timing of future claim reports and average claim sizes, using assumptions about claims settlement patterns, the expected effects of any known legal judgements and claims inflation. The resulting projected future claims cash flows are then discounted to a net present value at the accounting date using HM Treasury- prescribed discount rates.

The assumptions used in the projections are based on analysis of historical claims data, allowance for recent trends and consideration of the potential effects of underlying factors such as the volume of HM Land Registry activity and numbers of registered titles.

We provide input to the actuaries on these assumptions, based on the knowledge of the legal team that handles the claims.

Uncertainty in the provisions – sensitivity analysis 

The values of the Indemnity Fund Provisions are subject to future uncertain final settlement value, both for known claims and claims incurred but not reported (IBNR).

The uncertainty in value of outstanding claims could lead to a variation in the proposed provision. A range of scenarios have been considered in respect of the assumptions on:

• the proportion of claims that settle for zero;
• the average claim size;
• the HM Treasury prescribed discount rate;
• the number of claims that will be received; and
• the rate of inflation.

These scenarios have been considered in isolation and combination as shown in the sensitivity analysis table below.

On the basis of this analysis work:

• it is reasonably foreseeable that the value of liabilities could be in the region of £7.2m(Outstanding Provision) or £50.3m (IBNR Provision): and
• it is possible that in extreme favourable scenarios the value of liabilities could be as little as £7.2m (Outstanding Provision) and £20.4m (IBNR Provision).

We have also considered extreme adverse scenarios, where the value of liabilities is as much as £10.5m (Outstanding Provision) and £50.3m (IBNR Provision). The long-term open-ended nature of statutory indemnity means that these figures do not represent the maximum possible liability. However, we believe the likelihood of such scenarios to be small.The degree of uncertainty at future accounting dates may be different from that illustrated here. This could be fora number of reasons, for example because the profile of claims has changed or because the outlook on future claim trends has changed.At future accounting dates, it should be expected that:

• the outstanding provision will fluctuate depending on the volume of claims reported at the time, especially large claims;
• all else being equal, the IBNR Provision will increaseover time because of inflationary forces; and
• both the Outstanding Provision and the IBNR Provision will be particularly sensitive to the number and value of fraud and forgery claims as these are the most financially significant category of claims.

The Indemnity Fund Provision of £43.8m is a best estimate. Additionally, the future values of Indemnity Fund Provisions are subject to inherent uncertainties.

Sensitivity analysis

			2023-24
	Outstanding Provision Maximum £m	Outstanding Provision Minimum £m	Percentage movement %
Provided in these accounts (reasonably foreseeable value – see Note 14.2)	8.8	8.8	0%
Impact of scenarios Discount rate
1. Increase Treasury prescribed discount rate by 1.0% pa		(0.6)	-7%
2. Decrease Treasury prescribed discount rate by 1.0% pa	0.7		8%
Settlement costs
3. Increase settlement costs for the first development year by 5% for error claims	0.1		1%
4. Decrease settlement costs for the first development year by 5% for error claims		(0.1)	-1%
5. Increase settlement costs for the first development year by 5% for fraud claims	0.1		1%
6. Decrease settlement costs for the first development year by 5% for fraud claims		(0.1)	-1%
Extreme favourable scenarios
(1) + (4) + (6)		8.0
Extreme adverse scenarios
(2) + (3) + (5)	9.7

			2023-24
	IBNR Provision maximum £m	IBNR Provision minimum £m	Percentage movement increase %	Percentage movement decrease %
Provided in these accounts (reasonably foreseeable value – see Note 14.2)	35.0	35.0	0	0
Impact of scenarios
Favourable but foreseeable scenarios
Nil claims proportion
1. Change the nil claims proportion for attritional claims by +/- 5%	1.1	(1.1)	3%	-3%
2. Change the nil claims proportion for large claims by +/- 5%	0.7	(0.7)	2%	-2%
Average cost per claim
3. Change average cost per claim for attritional error claims by +/- 10%	1.1	(1.1)	3%	-3%
4. Change average cost per claim for large error claims by +/- 10%	0.7	(0.7)	2%	-2%
5. Change average cost per claim for attritional fraud claims by +/- 10%	0.4	(0.4)	1%	-1%
6. Change average cost per claim for large fraud claims by +/- 10%	0.4	(0.4)	1%	-1%
Discount rate
7. Increase Treasury prescribed discount rate by 1.0% pa		(2.5)		-7%
8. Decrease Treasury prescribed discount rate by 1.0% pa	2.8		8%
Projected number of IBNR claims
9. Increase projected number of attritional IBNR claims by 10%	1.8		5%
10. Decrease projected number of attritional IBNR claims by 10%		(1.8)		-5%
11. Increase projected number of large IBNR claims by 10%	1.1		3%
12. Decrease projected number of large IBNR claims by 10%		(1.1)		-3%
Future claims inflation
13. Increase assumed future claims inflation by 1%	2.8		8%
14. Decrease assumed future claims inflation by 1%		(2.5)		-7%
Extreme favourable scenarios
(1)+(2)+(3)+(4)+(5)+(6)+(7)+(10)+(12)+(14)		23.1
Extreme adverse scenarios
(1)+(2)+(3)+(4)+(5)+(6)+(8)+(9)+(11)+(13)	47.6

1 5. Contingent liabilities

Indemnity

The Land Registration Act 2002 places a legal liability on HM Land Registry to indemnify for losses resulting from errors or omissions in the register of title. This includes errors resulting from frauds perpetrated by third parties. As a statutory insurer of titles in England and Wales, indemnity payments are not confined to mistakes made by HM Land Registry. HM Land Registry provides for these claims under its Indemnity Fund both for known claims and claims incurred but not reported (IBNR) (see Note 14.2) based upon the assumed likelihood that claims will be successful.

As at 31 March 2024, the value of pending indemnity claims made to HM Land Registry is shown below. The estimated settlement value of these claims included within the Indemnity Fund provision is £8.8m (see Note 14.2) (2022-23: £12.2m).

	2023-24	2022-23
Errors or omissions	£’000	£’000
Mistakes	8,794	10,120
Fraud and forgery	13,897	19,744
	22,691	29,864

16. Capital commitments

	2023-24	2022-23
	£’000	£’000
Capital expenditure	12,781	18,770
Contracted for but not provided in these accounts	12,781	18,770

The reduction to nil of the Corporate Services and Internal Services programmes is due to these programmes concluding and efforts being turned to the Automation Programme, resulting in the increase there. Capital commitments within HM Land Registry’s Local Land Charges (LLC) Programme remain consistent with previous years’ trends. This programme is part of the Government’s Major Projects Portfolio, for which HM Land Registry receives ring-fenced funding.

This disclosure reflects HM Land Registry’s capital commitments where contracts were signed before 31 March 2024, which are not reflected within other notes to these accounts. Further information can be found at: HM Land Registry Government Major Projects Portfolio data, 2023 - GOV.UK (www.gov.uk).

	2023-24	2022-23
Programmes	£’000	£’000
Local Land Charges	9,181	10,992
Internal Services	–	2,706
Automation Programme	3,600	894
Corporate Services	–	4,179
	12,781	18,771

17. Related party disclosures

In accordance with IAS 24 Related Party Disclosures, as interpreted by the FReM, the following information is provided on related party transactions.During 2023-24, HM Land Registry had a number of material transactions with other government departments and other central government bodies.

Most of these transactions have been with Ordnance Survey, HM Courts and Tribunals and the Government Property Agency.None of the Board Members, or members of the key management staff or other related parties, have undertaken any material transactions with HM Land Registry during the year.

The Remuneration report provides information on key management compensation.

18. Events after the reporting period

In accordance with the requirements of IAS 10 Events After the Reporting Period, events after the Statement of Financial Position date are considered up to the date on which the financial statements are authorised for issue. This is interpreted as the date of the certificate and report of the Comptroller and Auditor General.

HM Land Registry Trust Statement 2023-24

Statement of Accounting Officer’s responsibilities

Under the Exchequer and Audit Departments Act 1921, HM Treasury has directed HM Land Registry to prepare, for each financial year, a Trust Statement (“the Statement”) in the form and on the basis set out in the Accounts Direction. The Statement is to be prepared on an accruals basis and must give a true and fair view of the state of affairs of the fees and charges, and of the related expenditure and cash flows for the financial year.

In preparing the accounts and trust statement, the Accounting Officer is required to comply with the requirements of the Government Financial Reporting Manual and in particular to:

• observe the Accounts Direction issued by HM Treasury, including the relevant accounting and disclosure requirements, and apply suitable accounting policies on a consistent basis;
• make judgements and estimates on a reasonable basis;
• state whether applicable accounting standards as set out in the Government Financial Reporting Manual have been followed, and disclose and explain any material departures in the accounts;
• prepare the accounts on a going concern basis; and
• confirm that the Annual Report and Accounts as a whole is fair, balanced and understandable and take personal responsibility for the Annual Report and Accounts and the judgements required for determining that it is fair, balanced and understandable.

The Permanent Secretary at HM Treasury has appointed the Chief Executive and Chief Land Registrar as Accounting Officer of HM Land Registry. The responsibilities of an Accounting Officer, including responsibility for the propriety and regularity of the public finances for which the Accounting Officer is answerable, for keeping proper records and for safeguarding the HM Land Registry’s assets, are set out in Managing Public Money published by HM Treasury.

As the Accounting Officer, I have taken all the steps that I ought to have taken to make myself aware of any relevant audit information and to establish that HM Land Registry’s auditors are aware of that information. So far as I am aware, there is no relevant audit information of which the auditors are unaware.

Governance Statement

As the Accounting Officer for HM Land Registry I have responsibility for maintaining corporate governance structures that support the achievement of HM Land Registry’s aims, objectives and targets, while safeguarding public funds and HM Land Registry’s assets.

HM Land Registry operates and follows the principles of good governance in accordance with HM Treasury guidance. The Governance Statement, which covers all aspects of HM Land Registry, including thosereported here in this Trust Statement, is provided in the Accountability report (pages 49 to 61).

Simon Hayes
Chief Executive and Chief Land Registrar
30 August 2024

The Certificate and Report of the Comptroller and Auditor General to The House of Commons

• Opinion on financial statementsI certify that I have audited the financial statements of the HM Land Registry Trust Statement for the year ended 31 March 2024 under the Exchequer and Audit Departments Act 1921.The financial statements comprise: HM Land Registry’s
• Statement of Financial Position as at 31 March 2024;
• Statement of Revenue, Statement of Other Income and Expenditure, and Statement of Cash Flows for the year then ended; and
• the related notes including the significant accountingpolicies.The financial reporting framework that has been applied in the preparation of the financial statements is applicable law and UK adopted international accounting standards.In my opinion, the financial statements:
• give a true and fair view of the state of HM Land Registry’s affairs as at 31 March 2024 and its net revenue for the consolidated fund for the year then ended; and
• have been properly prepared in accordance with the Exchequer and Audit Departments Act 1921 and HM Treasury directions issued thereunder.

Opinion on regularity

In my opinion, in all material respects, the income and expenditure recorded in the financial statements have been applied to the purposes intended by Parliament and the financial transactions recorded in the financial statements conform to the authorities which govern them.

Basis for opinions

I conducted my audit in accordance with International Standards on Auditing (UK) (ISAs UK), applicable law and Practice Note 10 Audit of Financial Statements and Regularity of Public Sector Bodies in the United Kingdom (2022). My responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of my report.

Those standards require me and my staff to comply with the Financial Reporting Council’s Revised Ethical

Standard 2019. I am independent of HM Land Registry in accordance with the ethical requirements that are relevant to my audit of the financial statements in the UK. My staff and I have fulfilled our other ethical responsibilities in accordance with these requirements.

I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion.

Conclusions relating to going concern

In auditing the financial statements, I have concluded that HM Land Registry’s use of the going concern basis of accounting in the preparation of the Trust Statement’s financial statements is appropriate.

Based on the work I have performed, I have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on HM Land Registry’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

My responsibilities and the responsibilities of the Accounting Officer with respect to going concern are described in the relevant sections of this certificate.

The going concern basis of accounting for HM Land Registry is adopted in consideration of the requirements set out in HM Treasury’s Government Financial Reporting Manual, which requires entities to adopt the going concern basis of accounting in the preparation of the financial statements where it is anticipated that the services which they provide will continue into the future.

Other information

The other information comprises information included in the Annual Report, but does not include the financial statements and my auditor’s certificate and report thereon. The Accounting Officer is responsible for the other information.

My opinion on the financial statements does not cover

the other information and, except to the extent otherwise explicitly stated in my certificate, I do not express any form of assurance conclusion thereon.

My responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or my knowledge obtained in the audit, or otherwise appears to be materially misstated.

If I identify such material inconsistencies or apparent material misstatements, I am required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work I have performed, I conclude that there is a material misstatement of this other information, I am required to report that fact.

I have nothing to report in this regard.

Opinion on other matters

In my opinion the part of the Remuneration and Staff Report to be audited has been properly prepared in accordance with HM Treasury directions made under the Exchequer and Audit Departments Act 1921.

In my opinion, based on the work undertaken in the course of the audit:

• the parts of the Accountability Report subject to audit have been properly prepared in accordance with HM Treasury directions made under the Exchequer and Audit Departments Act 1921;
• the information given in the Performance and Accountability Reports for the financial year for which the financial statements are prepared is consistent with the financial statements and is in accordance with the applicable legal requirements.

Matters on which I report by exception

In the light of the knowledge and understanding of HM Land Registry and its environment obtained in the course of the audit, I have not identified material misstatements in the Performance and Accountability Reports.I have nothing to report in respect of the following matters which I report to you if, in my opinion:

• Adequate accounting records have not been kept by HM Land Registry or returns adequate for my audit have not been received from branches not visited by my staff; or
• I have not received all of the information and explanations I require for my audit; or
• the financial statements and the parts of the Accountability Report subject to audit are not in agreement with the accounting records and returns; or
• certain disclosures of remuneration specified by HM Treasury’s Government Financial Reporting Manual have not been made or parts of the Remuneration and Staff Report to be audited is not in agreement with the accounting records and returns; or
• the Governance Statement does not reflect compliance with HM Treasury’s guidance.

Responsibilities of the Accounting Officer for the financial statements

As explained more fully in the Statement of AccountingOfficer’s Responsibilities, the Accounting Officer isresponsible for:

• maintaining proper accounting records;
• providing the C&AG with access to all information of which management is aware that is relevant to the preparation of the financial statements such as records, documentation and other matters;
• providing the C&AG with additional information and explanations needed for his audit;
• providing the C&AG with unrestricted access to persons within HM Land Registry from whom the auditor determines it necessary to obtain audit evidence;
• ensuring such internal controls are in place as deemed necessary to enable the preparation of financial statements to be free from material misstatement, whether due to fraud or error;
• ensuring that the financial statements give a true and fair view and are prepared in accordance with HM Treasury directions made under the Exchequer and Audit Departments Act 1921;
• ensuring that the annual report, which includes the Remuneration and Staff Report, is prepared inaccordance with HM Treasury directions made under the Exchequer and Audit Departments Act 1921; and
• assessing HM Land Registry’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Accounting Officer anticipates that the services provided by HM Land Registry will not continue to be provided in the future.

Auditor’s responsibilities for the audit of the financial statements

My responsibility is to audit, certify and report on the financial statements in accordance with the Exchequer and Audit Departments Act 1921.

My objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a certificate that includes my opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in theaggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Extent to which the audit was considered capable of detecting non-compliance with laws and regulations including fraud

I design procedures in line with my responsibilities, outlined above, to detect material misstatements in respect of non-compliance with laws and regulations, including fraud. The extent to which my procedures are capable of detecting non-compliance with laws and regulations, including fraud is detailed below.Identifying and assessing potential risks related to non-compliance with laws and regulations, including fraudIn identifying and assessing risks of material misstatement in respect of non-compliance with laws and regulations, including fraud, I:

• considered the nature of the sector, control environment and operational performance including the design of HM Land Registry’s accounting policies.

• inquired of management, HM Land Registry’s head of internal audit and those charged with governance, including obtaining and reviewing supporting documentation relating to HM Land Registry’s policies and procedures on:

• identifying, evaluating and complying with laws and regulations;
• detecting and responding to the risks of fraud; and

• the internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations including HM Land Registry’s controls relating to HM Land Registry’s compliance with the Exchequer and Audit Departments Act 1921 and Managing Public Money;

• inquired of management, HM Land Registry’s head of internal audit and those charged with governance whether:

• they were aware of any instances of non- compliance with laws and regulations;
• they had knowledge of any actual, suspected, or alleged fraud,
• discussed with the engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud.

As a result of these procedures, I considered the opportunities and incentives that may exist within HM Land Registry for fraud and identified the greatest potential for fraud in the following areas: revenue recognition, posting of unusual journals, complex transactions and bias in management estimates. In common with all audits under ISAs (UK), I am required to perform specific procedures to respond to the risk of management override.

I obtained an understanding of HM Land Registry’s framework of authority and other legal and regulatory frameworks in which HM Land Registry operates.

I focused on those laws and regulations that had a direct effect on material amounts and disclosures in the financial statements or that had a fundamental effect on the operations of HM Land Registry. The key laws and regulations I considered in this context included Exchequer and Audit Departments Act 1921, Managing Public Money, the Land Registration Act 2002, the Land Registration Rules 2003, the Agricultural Credits Act 1928 and the Land Charges Act 1972 and any relevant employment law, pensions and tax Legislation.

Audit response to identified riskTo respond to the identified risks resulting from the aboveprocedures:

• I reviewed the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described above as having direct effect on the financial statements;
• I enquired of management, the Audit and Risk Committee and in-house legal counsel concerning actual and potential litigation and claims;
• I reviewed minutes of meetings of those charged with governance and the Board; and internal audit reports;
• in addressing the risk of fraud through management override of controls, I tested the appropriateness of journal entries and other adjustments; assessed whether the judgements on estimates are indicative of a potential bias; and evaluated the business rationale of any significant transactions that are unusual or outside the normal course of business; and I also communicated relevant identified laws and regulations and potential risks of fraud to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

A further description of my responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: www.frc.org.uk/ auditorsresponsibilities. This description forms part of my certificate.

Other auditor’s responsibilities

I am required to obtain evidence sufficient to give reasonable assurance that the expenditure and income recorded in the financial statements have been applied to the purposes intended by Parliament and the financial transactions recorded in the financial statements conform to the authorities which govern them.

I communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control I identify during my audit.

Report

I have no observations to make on these financial statements.

Gareth Davies
Comptroller and Auditor General
National Audit Office
157-197 Buckingham Palace Road Victoria
London
SW1W 9SP

Trust Statement – Financial statements

Statement of Revenue,

### Other Income and Expenditure as at 31 March 2024

		2023-24	2022-23
	Note	£’000	£’000
Fees and Charges revenue
Registration of title	2.1	312,726	343,484
Land Charges and Agricultural Credits	2.1	5,483	6,482
Local Land Charges	2.1	1,064	789
Total Fees and Charges revenue		319,273	350,755
Commercial Income
Income from commercial activities	2.1	3,972	4,007
Total Commercial Income		3,972	4,007
Total revenue and other income		323,245	354,762
Expenditure
Collection costs	2.2	(263)	(188)
Other debts written off	3.3	14	(43)
Bad debts written off	3.3	(2)	(2)
Total expenditure		(251)	(233)
Net revenue for the Consolidated Fund	5	322,994	354,529

There were no recognised gains or losses accounted for outside the above Statement of Revenue, Other Income and Expenditure.

The notes at pages 113 to 115 form part of this statement.

Statement of Financial Position as at 31 March 2024

		2023-24	2022-23
	Note	£’000	£’000
Receivables falling due within one year
Current assets
Other receivables	3.1	2,049	926
Cash and cash equivalents		176,446	178,246
Total current assets		178,495	179,172
Current liabilities
Payables	4.1	–	–
Deferred revenue	4.1	174,830	172,126
Total current liabilities		174,830	172,126
Net current assets		3,665	7,046
Total net assets		3,665	7,046
Represented by:
Balance on Consolidated Fund Account	5	3,665	7,046

The notes at pages 113 to 115 form part of this statement.

Simon Hayes
Chief Executive and Chief Land Registrar
30 August 2024

Statement of cash flows for the year ended 31 March 2024

		2023-24	2022-23
	Notes	£’000	£’000
Net cash flow from operating activities	A	324,575	380,400
Cash paid to the Consolidated Fund	5	(326,375)	(355,063)
Increase/ (decrease) in cash in this period		(1,800)	25,337
Notes to Cash Flow Statement
A: Reconciliation of net cash flow to movement in net funds
Net revenue for the Consolidated Fund	SoCNE	322,994	354,529
(Increase)/ decrease in receivables	3.1	(1,123)	2,147
Increase/ (decrease) in liabilities	4.1	2,704	23,724
Net cash flow from operating activities		324,575	380,400
B: Analysis of changes in net funds
Increase/ (decrease) in cash in this period		(1,800)	25,337
Net funds at 1 April (Net Cash at Bank)		178,246	152,909
Net funds at 31 March (Closing Balance)		176,446	178,246
The following balances as at 31 March were held at:
Government Banking Service		176,446	178,246
Balance at 31 March		176,446	178,246

The notes at pages 113 to 115 form part of this statement.

Notes to the Trust Statement

1. Statement of Accounting Policies

1.1 Basis of accountingThe Trust Statement is prepared in accordance with:

• the 2023-24 Financial Reporting Manual (FReM) issued by HM Treasury, in particular Chapter 11.3 which deals with Consolidated Fund revenue and Trust Statements. The accounting policies contained in the FReM apply International Financial Reporting Standards (IFRS) as interpreted for the public sector; and
• the accounts direction issued by HM Treasury under section 2 (3) of the Exchequer and Audit Departments Act 1921.The accounting policies adopted in the Trust Statement are described below. The accounting policies have been applied consistently in dealing with items considered material in relation to the accounts.The income and associated expenditure contained in these statements are those flows of funds which HM Land Registry handles on behalf of the Consolidated Fund and where it is acting as agent rather than principal.The financial information contained in these statementsand in the notes is rounded to the nearest ‘£000.

1.2 Changes in accounting policy and disclosures 

There have been no changes in accounting policies for the reporting period. New standards, amendments and interpretations issued but not effective for the financial year beginning 1 April 2023 and not early adopted:

• IFRS 17 Insurance Contracts will become effective from 1 January 2025 for public sector organisations. This reporting standard is anticipated to have no accounting impact upon HM Land Registry as no such insurance contracts are held.

1.3 Accounting convention

The Trust Statement has been prepared under the historical cost convention. The preparation of the accounts in conformity with IFRS requires the use of certain critical accounting estimates (see Note 1.6). It also requires management to exercise its judgement in the process of applying the accounting policies.

1.4 Revenue recognition

Fees and charges are measured at the fair value of amounts received and in accordance with IFRS 15. Fees and charges are derived from the Land Registration Fee Order(http://www.legislation.gov.uk/) 2021 (https://www.legislation.gov.uk/ uksi/2021/1226/pdfs/uksi_20211226_en.pdf). They are included within the financial statements of the financial year in which the service is delivered. Income is recognised net of any refunds for transactions that are not completed, or on transactions where erroneous information is provided by customers.

Registration of title and Land Charges and Agricultural Credits income is recognised upon receipt of a completed application. If an application is not complete, the amount received is treated as a fee in advance, regardless of application type. All application types are accounted for consistently. The associated payment amounts received for services not delivered in the financial year reported are subsequently recorded as contract liabilities and disclosed within current liabilities.

Income is recognised once the contract performance obligation under IFRS 15 Revenue from Contracts with Customers has been fulfilled, that is once the register has been fully updated following receipt of an application.

1.5 Receivables

Receivables are shown net of impairments in accordance with the requirements of IFRS 9 Financial Instruments. Receivables are derecognised when the rights to receivecash flows from the assets have expired.

1.6 Critical accounting judgements and estimates 

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. When preparing the Trust Statement, HM Land Registry makes estimates and assumptions concerning the future. The most significant judgement area in the preparation of this Trust Statement relates to revenue recognition and the calculation of the deferred revenue balance. Further details on revenue recognition is contained in Note 1.4.

1.7 Impairment of debt and credit losses

Receivables are shown net of impairments in accordance with the requirements of the FReM and IFRS 9 Financial Instruments: disclosures. The fair value of receivablesis determined by making an impairment to reduce the carrying value of receivables by making an impairment to reduce the carrying value to the estimated future flow of repayments.HM Land Registry is not exposed to credit risk under IFRS 7 Financial Instruments.

1.8 Miscellaneous Consolidated Fund Extra Receipts (CFER) Income

In accordance with Managing Public Money, HM Treasury has powers to direct that income included in a departmental Estimate and approved by Parliament may be retained and used by the department. This is undertaken by applying this income against specific costs (resource or capital) within that Estimate. WhereHM Land Registry receives income outside that authority, the cash must be surrendered to the Consolidated Fund.

2. Statement of Revenue, Other Income and Expenditure Notes

2.1 Revenue and other income

	2023-24	2022-23
	£’000	£’000
Fees and charges
Registration of title	312,726	343,484
Land Charges and Agricultural Credits	5,483	6,482
Local Land Charges	1,064	789
Total fees and charges	319,273	350,755
Commercial Income
Income from commercial activities	3,972	4,007
Total Commercial Income	3,972	4,007
Total Revenue and Other Income	323,245	354,762

2.2 Expenditure

	2023-24	2022-23
	£’000	£’000
Collection costs	(263)	(188)
Total Expenditure	(263)	(188)

3. Receivables

3.1 Current receivables

	2023-24	2022-23
	£’000	£’000
Receivables	2,056	932
Provision for doubtful debt	(7)	(6)
Receivable before impairment	2,049	926
less estimated impairments	–	–
Total receivables as at 31 March	2,049	926

Receivables represents the amount due from taxpayers and businesses where invoices or other demands for payment have been issued but not paid for at 31 March 2024. Debts are written off only when the debtor is dissolved, bankrupt or in liquidation and the debt is deemed unrecoverable through any further means.

Individual application receipts are only processed once the relevant fee has been accounted for. The total collectable is spread over a high volume of different customers with associated low-value fees. Accordingly, the likelihood of non-collection of fees and credit risk exposure have both been determined as insignificant in terms of overall risk.

3.2 Non current receivables

There are no amounts falling due after more than one year.

3.3 Credit losses

	2023-24	2022-23
Note	£’000	£’000
Other debts written off	14	(43)
Bad debt written off	(2)	(2)
Total	12	(45)

4. Payables and deferred revenue

4.1 Current payables

	2023-24	2022-23
	£’000	£’000
Payables	–	–
Deferred revenue	174,830	172,126
Total payables and deferred revenue at 31 March	174,830	172,126

Payables are the amounts established as due at the balance sheet date, but where payment is made subsequently.

Deferred revenue includes income for fees paid in the current year that relate to future financial periods.

4.2. Non-current payables

There are no amounts falling due after more than one year.

5. Balance on the Consolidated Fund Account

		2023-24	2022-23
	Note	£’000	£’000
Balance on Consolidated Fund as at 1 April		7,046	7,580
Net revenue for the Consolidated Fund	SOCNE	322,994	354,529
Less amount paid to the Consolidated Fund		(326,375)	(355,063)
Balance on Consolidated Fund Account as at 31 March		3,665	7,046

6. Related party disclosures

In accordance with IAS 24 Related Party Disclosures, as interpreted by the FReM, the following information is provided on related party transactions.

None of the Board Members, or members of the key management staff or other related parties, have undertaken any material transactions with HM Land Registry during the year.

The Remuneration report provides information on key management compensation.

7. Events after the reporting period

In accordance with the requirements of IAS 10 Events after the Reporting Period, post year end events are considered up to the date on which the accounts are authorised for issue. This is interpreted as the date of the Certificate and Report of the Comptroller and Auditor General. The accounts do not reflect events after this date.