Electrocomponents plc RS Radiospares Radionics Allied Electronics
Annual report & accounts 2009

Taxation

The Group’s effective tax rate was 32% of headline profit before tax, which was 1% point lower than the prior year. This reduction was principally due to the lowering of local tax rates in some of the territories within which the Group operates, including the reduction of the UK tax rate by 2% points. The Group’s current effective tax rate includes the effect of a significant and continuing increase in the deferred tax liability due to the tax amortisation of overseas goodwill. This deferred tax liability is not expected to crystallise in the foreseeable future. This, together with the differing timing of payments, means that the effective tax rate was significantly higher than the cash tax rate of 24%.