BT 2013 Annual Report Download - page 126
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124 Financial statements
10. Taxation continued
Factors affecting future tax charges
The rate of UK corporation tax changed from 24% to 23% on 1 April 2013. As deferred tax assets and liabilities are measured at the rates that are
expected to apply in the periods of the reversal, deferred tax balances at 31 March 2013 have been calculated using a rate of 23%. This reduction
has been recognised as a deferred tax credit of £105m and as a specific item in the income statement (note 9) and a deferred tax expense of £94m
in other comprehensive income.
The Government has also indicated that it intends to enact a further reduction in the main rate of UK corporation tax to 21% by 1 April 2014 and to
20% by 1 April 2015. The future annual corporation tax rate reduction is expected to affect the group’s financial statements. The actual impact will
depend on the group’s deferred tax position at that time.
Unrecognised tax losses and other temporary differences
At 31 March 2013 the group had operating losses, capital losses and other temporary differences carried forward in respect of which no deferred
tax assets were recognised amounting to £22.0bn (2011/12: £21.8bn). The group’s capital losses and other temporary differences have no expiry
date restrictions. The expiry date of operating losses carried forward is dependent upon the tax law of the various territories in which the losses
arose. A summary of expiry dates for losses in respect of which restrictions apply is set out below:
2013 Expiry of
At 31 March £m losses
Restricted losses
Europe 464 2014-27
Americas 102 2014-32
Other 1 2014-22
Total restricted losses 567
Unrestricted losses
Operating losses 3,640 No expiry
Capital losses 17,214 No expiry
Total unrestricted losses 20,854
Other temporary differences 543
Total 21,964
At 31 March 2013 the undistributed earnings of overseas subsidiaries were £11.1bn (2011/12: £10.8bn). No deferred tax liabilities have been
recognised in respect of these unremitted earnings because the group is in a position to control the timing of the reversal of the temporary
differences and it is probable that such differences will not reverse in the foreseeable future.