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| 10.
Tax on profit (loss) on ordinary activities |
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| United Kingdom: |
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Corporation tax at 30% (2000
– 30%, 1999 – 31%) |
690 |
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852 |
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1,200 |
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Deferred taxation charge (credit)
at 30% |
27 |
|
(3 |
) |
71 |
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Taxation on the group’s
share of results of associates |
6 |
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3 |
|
1 |
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Taxation on the group’s
share of results of joint ventures |
42 |
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– |
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– |
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Prior year adjustments |
(296 |
) |
4 |
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– |
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| Total UK taxation |
469 |
|
856 |
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1,272 |
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| Non-UK taxation: |
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Current |
24 |
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5 |
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14 |
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Taxation charge on the group's
share of results of joint ventures |
33 |
|
11 |
|
3 |
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Taxation charge on the group's
share of results of associates |
146 |
|
25 |
|
4 |
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Prior year adjustments |
(20 |
) |
– |
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– |
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| Total tax on
profit (loss) on ordinary activities |
652 |
|
897 |
|
1,293 |
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In
the year ended 31 March 2001, the loss on ordinary activities
before taxation was £1,031 million, after charging £3,200
million goodwill impairment, which is not an allowable
expense for taxation. In the following table, the effective
corporation tax rate is reconciled to the profit of £2,169
million before this impairment charge.
Total tax on profit on ordinary activities, varied from
the amount computed by applying the corporation tax rate
to profit on ordinary activities before taxation. The
differences were attributable to the following factors:
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| UK corporation tax rate |
30.0 |
|
30.0 |
|
31.0 |
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| Non-deductible depreciation
and amortisation |
9.0 |
|
2.5 |
|
0.6 |
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| Non-deductible non-UK losses |
11.3 |
|
2.7 |
|
1.5 |
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| Higher taxes on non-UK profits |
4.0 |
|
– |
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– |
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| Unprovided deferred taxes on
excess capital allowances |
(2.8 |
) |
(2.0 |
) |
(0.7 |
) |
| Lower effective tax on net foreign
exchange gains |
– |
|
(1.2 |
) |
– |
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| Effect of reduction in UK corporation
tax rate on deferred tax provision |
– |
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– |
|
(0.1 |
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| Lower effective tax on gain
in MCI shares |
– |
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– |
|
(2.4 |
) |
| Lower effective tax on gain
on disposal of fixed asset investments and group
undertakings |
(8.3 |
) |
(1.2 |
) |
– |
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| Prior year adjustments |
(14.6 |
) |
– |
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– |
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| Other |
1.5 |
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(0.3 |
) |
0.2 |
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| Effective corporation tax
rate |
30.1 |
|
30.5 |
|
30.1 |
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Deferred
taxation of £60 million (2000 – £60 million, 1999
– £30 million) arising on excess capital allowances
was not provided in the year ended 31 March 2001.
The deferred taxation charge (credit) was mainly the result
of the tax effect of timing differences as follows: |
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| Excess capital allowances |
(74 |
) |
(80 |
) |
1 |
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| Pension provisions |
87 |
|
97 |
|
81 |
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| Other timing differences |
14 |
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(20 |
) |
(11 |
) |
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| |
27 |
|
(3 |
) |
71 |
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| Prior year adjustments
(a) |
(111 |
) |
16 |
|
5 |
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| Total deferred
taxation charge (credit) |
(84 |
) |
13 |
|
76 |
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| (a) |
Reclassification
between deferred and current taxation on the profit
on ordinary activities for prior years. |
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