Question to the Cabinet Office:

To ask the Minister for the Cabinet Office, with reference to page 113 of the Cabinet Office Annual report and accounts 2024-2025, HC1372, 23 October 2025, for what reason dividends from associates are treated as income in the Statement of Outturn against Parliamentary Supply.

Section 8.13 of Consolidated budget guidance issued by HM Treasury states that:

“Financial transactions involve the exchange of financial assets and liabilities. Financial transactions mainly impact on the resource budget through the returns received or paid on these financial assets or liabilities (for example, interest received/paid on a loan, or dividends received/paid on equity). Financial assets also impact on the resource budget through changes in their valuation.”

Therefore, all dividend income received from associate companies should score to RDEL as income.

Dividends from associate companies are not recognised as income in the financial statements because International Accounting Standard IAS 28 Investments in Associates and Joint Ventures, states:

“When using the equity method, dividends received are not recognised as income in the consolidated income statement; instead, they are treated as a return of capital and reduce the carrying amount of the investment in the statement of financial position.”