Other group items
Specific items
Specific items for 2008, 2007 and 2006 are shown in the table below.
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2008
£m |
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|
2007
£m |
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|
2006
£m |
|
| Operating costs |
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|
|
|
|
|
|
|
| Restructuring costs |
402 |
|
|
– |
|
|
– |
|
| Property rationalisation costs |
– |
|
|
64 |
|
|
68 |
|
| Write off of circuit inventory
and other
working capital balances |
74 |
|
|
65 |
|
|
– |
|
| Creation of Openreach and
delivery of
the Undertakings |
53 |
|
|
30 |
|
|
70 |
|
| Costs associated with settlement
of open
tax years |
– |
|
|
10 |
|
|
– |
|
|
|
|
|
|
|
|
|
|
| |
529 |
|
|
169 |
|
|
138 |
|
| Other operating income |
|
|
|
|
|
|
|
|
| Net loss on sale of group undertakings |
10 |
|
|
5 |
|
|
– |
|
| Profit on sale of non current
asset investments |
– |
|
|
(2 |
) |
|
– |
|
|
|
|
|
|
|
|
|
|
| |
10 |
|
|
3 |
|
|
– |
|
| Finance income |
|
|
|
|
|
|
|
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| Interest on settlement of
open tax years |
– |
|
|
(139 |
) |
|
– |
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| Associates and joint ventures |
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| Profit on sale of joint venture |
– |
|
|
– |
|
|
(1 |
) |
| Profit on sale of associate |
(9 |
) |
|
(22 |
) |
|
– |
|
|
|
|
|
|
|
|
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| Net specific items charge before tax |
530 |
|
|
11 |
|
|
137 |
|
|
|
|
|
|
|
|
|
|
| Tax credit on specific items above |
(149 |
) |
|
(41 |
) |
|
(41 |
) |
| Tax credit in respect of
settlement of open
tax years |
(40 |
) |
|
(938 |
) |
|
– |
|
| Tax credit on re-measurement
of deferred
taxes |
(154 |
) |
|
– |
|
|
– |
|
|
|
|
|
|
|
|
|
|
| Net specific items charge
(credit) after
tax |
187 |
|
|
(968 |
) |
|
96 |
|
|
|
|
|
|
|
|
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|
In 2008, specific operating costs included £402 million (2007 and 2006: £nil) in respect of restructuring costs relating to our transformation activities in the year. The most significant element of the
charge related to manager leaver costs, and also property exit and transformation programme costs. A charge of £74 million (2007: £65 million, 2006: £nil) was recognised as a result of the completion of a review of circuit inventory
and other working capital balances which commenced in 2007. A charge of £53 million (2007: £30 million, 2006: £70 million) was recognised in relation to further estimated costs required to create Openreach and deliver the Undertakings
agreed with Ofcom, particularly with regard to the introduction of equivalence of input systems, which are due to complete in 2010. In 2007 and 2006 we incurred property rationalisation costs of £64 million and £68 million,
respectively.
In
both 2008 and 2007, we recognised losses on disposal of group undertakings, principally
in relation to the disposal of our satellite broadcast business. In 2008, the
net loss on
disposal was £10 million (2007: £5 million, 2006: £nil). In 2008, we recognised a £9 million profit arising from the receipt of contingent consideration from the disposal of our interest in an associate, e-peopleserve. In 2007,
we also disposed of 6% of our equity interest in our associate Tech Mahindra Limited, resulting in a profit on disposal of £22
million.
In
2008, we agreed an outstanding tax matter relating to a business demerged in
2001, the impact of which was a tax credit of £40 million and this closes all open items in relation to
the settlement reached last year. In 2007, we agreed the settlement of substantially all open UK tax matters relating to ten tax years up to and including 2004/05 with HM Revenue and Customs (HMRC). In 2007, the total impact of the settlement was a
net credit of £1,067 million comprising a tax credit of £938 million representing those elements of the tax charges previously recognised which were in excess of the final agreed liability, interest income of £139 million and
operating costs of £10 million, representing the costs associated with reaching this agreement. A tax credit of £154
million has also been recognised in 2008 for the re-measurement of deferred tax
balances as a result of the change in the UK statutory corporation tax rate from
30% to 28%, effective in 2009.
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