Accounts
Notes to the Accounts
Note 9 – Taxation
| | 2005 £m |
2004 £m | 2003 £m |
|---|---|---|---|
| United Kingdom | |||
| Corporation tax at 30% | 123 | 193 | 12 |
| Adjustment in respect of prior years (i) | (19) | (35) | – |
| Deferred tax | 4 | (15) | 107 |
| 108 | 143 | 119 | |
| Overseas | |||
| Corporate tax | 33 | 16 | 27 |
| Adjustment in respect of prior years | (21) | – | – |
| Deferred tax | 123 | 99 | 94 |
| 135 | 115 | 121 | |
| 243 | 258 | 240 | |
| Joint ventures | 2 | 3 | 5 |
| Taxation | 245 | 261 | 245 |
| Comprising: | |||
| Taxation - excluding exceptional items | 324 | 350 | 373 |
| Taxation - exceptional items (note 4(d)) | (79) | (89) | (128) |
| 245 | 261 | 245 |
| (i) | The UK corporation tax adjustment in respect of prior years includes £10m (2004: £29m; 2003: £nil) that relates to exceptional items. |
|---|
A reconciliation of the UK corporation tax rate to the effective tax rate of the Group is as follows:
| % of profit before taxation | |||
|---|---|---|---|
| | 2005 | 2004 (restated) | 2003 (restated) |
| UK corporation tax rate | 30.0 | 30.0 | 30.0 |
| Effect on tax charge of: | |||
| - Origination and reversal of timing differences | (11.2) | (9.6) | (12.7) |
| - Permanent differences | (3.9) | (7.0) | 3.1 |
| - Overseas income taxed at other than UK statutory rate | – | 3.3 | (2.5) |
| - Other | (0.1) | (0.1) | 0.3 |
| Current tax charge | 14.8 | 16.6 | 18.2 |
| Deferred taxation | 10.0 | 9.0 | 12.7 |
| Effective tax rate before goodwill amortisation, prior year adjustments in respect of current tax and exceptional items |
24.8 | 25.6 | 30.9 |
| Effect of goodwill amortisation | 2.0 | 2.0 | 2.8 |
| Effective tax rate before prior year adjustments in respect of current tax and exceptional items | 26.8 | 27.6 | 33.7 |
| Current tax adjustment in respect of prior years | (2.3) | (0.5) | – |
| Effective tax rate after adjustments in respect of prior years and before exceptional items |
24.5 | 27.1 | 33.7 |
| Exceptional items | (3.2) | (7.5) | 5.3 |
| Effective tax rate after exceptional items | 21.3 | 19.6 | 39.0 |
Factors that may affect future tax charges
The Group has brought forward non-trading debits of £39m (2004: £75m; 2003: £75m), which may reduce taxable profits in future years.
No provision has been made for deferred tax arising on gains recognised in respect of the sale of properties where potentially taxable gains have been rolled over into replacement assets. Such tax would become payable only if the replacement assets were sold without it being possible to claim roll-over relief. The total amount unprovided for at 31 March 2005 was £73m (2004: £58m; 2003: £58m). At present, it is not envisaged that any tax on amounts rolled over will become payable in the foreseeable future.