Notes to the accounts
6. Taxation
|
Continuing Year ended |
Continuing |
Discontinued Year ended |
Discontinued |
|---|---|---|---|---|
The taxation charge for the year comprises |
|
|
|
|
– current taxation |
65.7 |
67.0 |
|
|
– deferred taxation |
29.2 |
8.0 |
0.2 |
2.3 |
Total taxation expense in the income statement |
94.9 |
75.0 |
0.2 |
2.3 |
Current taxation |
|
|
|
|
– UK corporation tax |
|
|
|
|
– foreign tax |
65.7 |
67.0 |
|
|
– discontinued tax |
|
|
|
|
|
65.7 |
67.0 |
|
|
Reconciliation of the total tax charge
The tax expense on the profit for the period is different from the standard rate of corporation tax in the UK of 28% (2008: 29.3%). The difference is reconciled as follows:
|
Continuing Year ended |
Continuing |
Discontinued Year ended |
Discontinued |
|---|---|---|---|---|
Profit before tax |
370.8 |
319.3 |
(5.7) |
26.8 |
Notional taxation expense at UK rate of 28% (2008: 29.3%) |
103.8 |
93.7 |
(1.6) |
7.9 |
Effect of overseas taxation |
10.6 |
8.2 |
|
|
Compliance benefits |
(16.8) |
(12.4) |
|
|
Local incentives |
(8.8) |
(16.1) |
|
|
Tax effect of other non-headline items |
6.1 |
1.6 |
|
|
Tax effect of Aerospace sale |
|
|
1.8 |
(5.6) |
|
94.9 |
75.0 |
0.2 |
2.3 |
Comprising |
|
|
|
|
– taxation on headline profit |
88.8 |
91.3 |
|
|
– tax on non-headline profit/(loss) |
6.1 |
(16.3) |
|
|
– tax on sale of discontinued operations |
|
|
0.2 |
2.3 |
Total taxation expense in the income statement |
94.9 |
75.0 |
0.2 |
2.3 |
|
Year ended |
Year ended |
|---|---|---|
Tax on items charged/(credited) to equity |
|
|
Current tax credit |
|
|
– share-based payment |
|
(5.2) |
|
|
(5.2) |
Deferred tax (credit)/charge |
|
|
– retirement benefit schemes |
(94.3) |
(75.5) |
– share-based payment |
4.0 |
3.8 |
|
(90.3) |
(76.9) |
Deferred taxation
|
Excess tax |
Share-based |
Retirement |
Capitalised |
Other |
Total |
|---|---|---|---|---|---|---|
At 31 July 2007 |
(72.1) |
15.7 |
(55.2) |
(10.2) |
97.8 |
(24.0) |
Credit/(charge) to income statement |
9.7 |
0.3 |
(31.3) |
(1.6) |
12.6 |
(10.3) |
Charge to equity |
|
(3.8) |
75.5 |
|
|
71.7 |
Other |
|
|
|
|
6.0 |
6.0 |
Disposals |
|
|
|
|
(12.8) |
(12.8) |
Exchange adjustments |
(1.9) |
|
0.5 |
(0.2) |
2.9 |
1.3 |
At 31 July 2008 |
(64.3) |
12.2 |
(10.5) |
(12.0) |
106.5 |
31.9 |
Deferred tax assets |
(2.6) |
0.3 |
19.7 |
(4.6) |
83.4 |
96.2 |
Deferred tax liabilities |
(61.7) |
11.9 |
(30.2) |
(7.4) |
23.1 |
(64.3) |
At 31 July 2008 |
(64.3) |
12.2 |
(10.5) |
(12.0) |
106.5 |
31.9 |
Credit/(charge) to income statement |
8.0 |
(4.3) |
(35.8) |
(4.0) |
6.7 |
(29.4) |
Charge to equity |
|
(4.0) |
94.3 |
|
|
90.3 |
Other |
(4.1) |
|
|
|
|
(4.1) |
Exchange adjustments |
(8.0) |
|
3.0 |
(1.6) |
16.1 |
9.5 |
At 31 July 2009 |
(68.4) |
3.9 |
51.0 |
(17.6) |
129.3 |
98.2 |
Deferred tax assets |
(4.9) |
3.9 |
50.6 |
(8.9) |
124.0 |
164.7 |
Deferred tax liabilities |
(63.5) |
|
0.4 |
(8.7) |
5.3 |
(66.5) |
At 31 July 2009 |
(68.4) |
3.9 |
51.0 |
(17.6) |
129.3 |
98.2 |
Included in Other above is a deferred tax liability of £4.0m (2008: £9.3m) relating to unremitted overseas earnings. No additional tax liabilities have been recognised because the Group is in a position to control the timing of other temporary differences and it is probable that such differences will not reverse in the future. Other deferred tax also includes the tax benefits of losses carried forward amounting to £31.3m (2008: £26.7m).
The Group has not recognised deferred tax assets relating to tax losses of £78.3m (2008: £102.2m), due to uncertainty as to their recoverability. The expiry date of operating losses carried forward is dependent upon the law of the various territories in which the losses arise. A summary of expiry dates for losses in respect of which restrictions apply is set out below.
Restricted losses
|
2009 |
Expiry of |
2008 |
Expiry of |
|---|---|---|---|---|
Territory |
|
|
|
|
– Americas |
10.7 |
2019-2025 |
10.7 |
2019-2025 |
Total restricted losses |
10.7 |
|
10.7 |
|
Unrestricted losses: |
|
|
|
|
– operating losses |
67.6 |
No expiry |
91.5 |
No expiry |
Total |
78.3 |
|
102.2 |
|