Barclays 2011 Annual Report Download - page 215

9 UK bank levy
UK legislation was enacted in July 2011 to introduce an annual bank levy, which applies to elements of the Group’s consolidated liabilities and equity
held as at the year end. The levy has resulted in an additional charge to the income statement of £325m, which was recognised as at 31 December
2011 and is presented within operating expenses. The IFRS Interpretations Committee is considering the timing of recognition of the levy going forward.
10 Loss on disposal of subsidiaries, associates and joint ventures
On 25 October 2011, Barclays completed the disposal of Barclays Bank Russia as part of refocusing its Russian activities. A loss on disposal of £73m has
been recognised in the income statement within Barclays Corporate and the accumulated foreign exchange losses of £23m, previously recognised
directly in equity, have been recycled through the income statement within Head Office Functions.
11 Tax
Accounting for income taxes
Barclays applies IAS 12 Income Taxes in accounting for taxes on income. Income tax payable on taxable profits (‘Current Tax’) is recognised as an
expense in the period in which the profits arise. Withholding taxes are also treated as income taxes. Income tax recoverable on tax allowable losses
is recognised as a current tax asset only to the extent that it is regarded as recoverable by offset against taxable profits arising in the current or prior
period. Current tax is measured using tax rates and tax laws that have been enacted or substantively enacted at the balance sheet date.
Deferred tax is provided in full, using the liability method, on temporary differences arising from the differences between the tax bases of assets and
liabilities and their carrying amounts in the consolidated financial statements. Deferred tax is determined using tax rates and legislation enacted or
substantively enacted by the balance sheet date which are expected to apply when the deferred tax asset is realised or the deferred tax liability is
settled. Deferred tax assets and liabilities are only offset when there is both a legal right to set-off and an intention to settle on a net basis.
2011
£m
2010
£m
2009
£m
Current tax charge
Current year 2,690 1,413 1,249
Adjustment for prior years (61) (20) (118)
2,629 1,393 1,131
Deferred tax (credit)/charge
Current year (631) 118 45
Adjustment for prior years (70) 5 (102)
(701) 123 (57)
Tax charge 1,928 1,516 1,074
On 27 February 2012, the UK tax authority, HMRC announced its intention to implement new tax legislation, to apply retrospectively from 1 December
2011, that would result in the £1,130m gains on debt buy-backs becoming fully taxable. Barclays voluntarily disclosed the transaction to HMRC and, as
at 31 December 2011, held a provision for the potential tax payable in relation to the debt buy-back. If the legislation had been enacted as at 31
December 2011 it would not have had a material impact on the Group’s 2011 results.
Tax relating to each component of other comprehensive income can be found in the consolidated statement of comprehensive income, which includes
within Other a tax credit of £74m (2010: £59m; 2009: £218m), principally relating to share based payments.
Barclays PLC Annual Report 2011 www.barclays.com/annualreport 213
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