Barclays 2014 Annual Report Download - page 273

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9 Profit/(loss) on disposal of subsidiaries, associates and joint ventures
During the year, the loss on disposal of subsidiaries, associates, and joint ventures was £471m (2013: gain of £6m), principally relating to the
announced disposal of Spanish entities. Please refer to Note 45 Non-current assets held for disposal and associated liabilities.
10 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.
2014
£m
2013
£m
2012
£m
Current tax charge
Current year 1,421 1,997 568
Adjustment for prior years (19) 156 207
1,402 2,153 775
Deferred tax charge/(credit)
Current year 75 (68) (72)
Adjustment for prior years (66) (514) (87)
9 (582) (159)
Tax charge 1,411 1,571 616
Tax relating to each component of other comprehensive income can be found in the consolidated statement of comprehensive income which
additionally includes within Other a tax charge of £42m (2013: £37m charge) principally relating to share based payments in 2014 and 2012, and
the UK rate change in 2013.
The table below shows the reconciliation between the actual tax charge and the tax charge that would result from applying the standard UK
corporation tax rate to the Group’s profit before tax.
2014
£m
2013
£m
2012
£m
Profit before tax from continuing operations 2,256 2,868 797
Tax charge based on the standard UK corporation tax rate of 21.5% (2013: 23.25%; 2012: 24.5%) 485 667 195
Effect of non-UK profits/losses at statutory tax rates different from the UK statutory tax rate 171 267 401
Non-creditable taxes 329 559 563
Non-taxable gains and income (282) (234) (642)
Share based payments 21 (13) (63)
Changes in recognition and measurement of deferred tax assets (183) 409 (135)
Change in tax rates 9 (159) (75)
Non-deductible impairment charges, loss on disposals and UK bank levy 333 118 84
Other items including non-deductible expenses 613 315 168
Adjustments in respect of prior years (85) (358) 120
Tax charge 1,411 1,571 616
Effective tax rate 62.5% 54.8% 77.3%
The tax charge of £1,411m (2013: £1,571m) represented an effective tax rate of 62.5% (2013: 54.8%) on profit before tax of £2,256m (2013:
£2,868m). The effective tax rate increased due to an increase in non-deductible expenses, including the provision for ongoing investigations and
litigation relating to Foreign Exchange, and the non-recurrence of a credit of £337m resulting from settlements with non-UK tax authorities in
2013. These were partially offset by a change in the jurisdictional mix of profits, a reduction in non-creditable taxes in 2014 and the non-recurrence
of a £440m write down of the Spanish deferred tax asset which increased the rate in 2013. The adjustments in respect of prior years are not
considered to be indicative of future trends.
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