|
|
Notes to the financial statements
|
| 9. |
Tax on profit (loss) on ordinary activities |
| |
|
|
2005
£m |
|
|
2004
£m |
|
|
2003
£m |
|
|
|
United Kingdom: |
|
|
|
|
|
|
|
|
|
|
Corporation tax at 30% |
|
|
542 |
|
|
328 |
|
|
447 |
|
Prior year adjustments |
|
|
4 |
|
|
– |
|
|
12 |
|
Non-UK taxation: |
|
|
|
|
|
|
|
|
|
|
Current |
|
|
(4 |
) |
|
37 |
|
|
47 |
|
Taxation on the group’s share of results of associates and joint ventures |
|
|
1 |
|
|
– |
|
|
81 |
|
Prior year adjustments |
|
|
(3 |
) |
|
– |
|
|
(26 |
) |
|
|
Total current taxation |
|
|
540 |
|
|
365 |
|
|
561 |
|
Deferred taxation (credit) charge at 30% |
|
|
|
|
|
|
|
|
|
|
Origination and reversal of timing differences |
|
|
(18 |
) |
|
184 |
|
|
(29 |
) |
Prior year adjustments |
|
|
1 |
|
|
(10 |
) |
|
(73 |
) |
|
|
Total deferred taxation |
|
|
(17 |
) |
|
174 |
|
|
(102 |
) |
|
|
Total tax on profit (loss) on ordinary activities |
|
|
523 |
|
|
539 |
|
|
459 |
|
|
|
The tax credit relating to exceptional items is £16 million (2004 – £29 million, 2003 – £139 million).
A
tax charge on recognised gains and losses not included in the profit
and loss account of £7 million (2004 – £47 million,
2003 – £16 million) related to exchange movements offset
in reserves.
Current tax and total tax on profit on ordinary activities, differs 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:
| |
|
|
2005
% |
|
|
2004
% |
|
|
2003
% |
|
|
|
UK corporation tax rate |
|
|
30.0 |
|
|
30.0 |
|
|
30.0 |
|
Non-deductible depreciation, amortisation and impairment |
|
|
0.2 |
|
|
0.9 |
|
|
0.4 |
|
Non-deductible non-UK losses |
|
|
1.6 |
|
|
1.6 |
|
|
3.3 |
|
(Lower) higher taxes on non-UK profits |
|
|
(0.6 |
) |
|
0.2 |
|
|
0.4 |
|
Excess depreciation over capital allowances |
|
|
– |
|
|
3.2 |
|
|
3.4 |
|
Pension provisions and prepayments |
|
|
0.7 |
|
|
(9.9 |
) |
|
(3.2 |
) |
Other timing differences |
|
|
0.1 |
|
|
(2.8 |
) |
|
0.7 |
|
Lower effective tax on gain on disposal of fixed asset |
|
|
|
|
|
|
|
|
|
|
investments and group undertakings |
|
|
(4.6 |
) |
|
(1.3 |
) |
|
(16.5 |
) |
Higher effective tax on gain on disposal of non qualifying assets |
|
|
– |
|
|
– |
|
|
2.0 |
|
Prior year adjustments |
|
|
0.1 |
|
|
– |
|
|
(2.0 |
) |
Other |
|
|
(4.4 |
) |
|
(3.2 |
) |
|
(0.8 |
) |
|
|
Current tax – effective corporation tax rate |
|
|
23.1 |
|
|
18.7 |
|
|
17.7 |
|
Deferred taxes on excess depreciation over capital allowances |
|
|
– |
|
|
(3.2 |
) |
|
(3.4 |
) |
Pension provisions and prepayments |
|
|
(0.7 |
) |
|
9.9 |
|
|
3.2 |
|
Other timing differences |
|
|
(0.1 |
) |
|
2.8 |
|
|
(0.7 |
) |
Prior year adjustments |
|
|
– |
|
|
(0.5 |
) |
|
(2.3 |
) |
|
|
Total tax – effective corporation tax rate |
|
|
22.3 |
|
|
27.7 |
|
|
14.5 |
|
|
|
| |
Factors that may affect future tax charges |
The group operates in countries where the tax rate is different to the UK corporate tax rate, primarily the USA, the Netherlands, the Republic of Ireland, Germany and Spain.
As at 31 March 2005, the group had overseas corporate tax losses estimated to be £1 billion which are not recognised as deferred tax assets. In addition, the group has unutilised capital losses estimated to be in excess of £10 billion which were not recognised as deferred tax assets.
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