Investigation Matters

Means Test

For the years under review, prepare a means test to check that the net available means (income less known and quantifiable expenditure) are sufficient to meet normal day to day expenditure.

Income includes:

• Drawings by way of cash, cheque, DDs or S/Os (include income of spouse)
• income from employment (include income of spouse)
• pensions, state benefits etc
• proceeds from sale of capital assets, gifts, loans, winnings etc
• investment income
• an overall decrease in bank etc balances in the year

Expenditure includes:

• cash introduced into the business (including introduced by spouse)
• known (or estimated) recurring expenditure on such things as life assurance, education, tax, NIC and household bills, other than day to day expenditure on food, household items, clothes, entertainment etc
• expenditure on capital items, holidays, weddings, gifts, loans made etc
• an overall increase in bank etc balances in the year
• bank interest and charges

The net available means should be compared-

• one year with another for consistency
• with the Family Expenditure Survey (FES)

To compare one year with another, use the Retail Price Index (RPI) shown below to convert to current values.

To compare with the FES, use the FES figures below, which have been adjusted to exclude expenditure already included in the means test, leaving only average day to day expenditure on food etc. The figures are an average for the UK as a whole; in individual cases account must be taken of the family size and the region of the UK.