National Grid 2008 Annual Report Download - page 655

BOWNE INTEGRATED TYPESETTING SYSTEM
CRC: 10692
Name: NATIONAL GRID
Date: 17-JUN-2008 03:10:51.35Operator: BNY99999TPhone: [phone]Site: BOWNE OF NEW YORK
Y59930.SUB, DocName: EX-15.1, Doc: 16, Page: 128
Description: EXHIBIT 15.1
0/7324.00.00.00Y59930BNY
[E/O] EDGAR 2 *Y59930/324/7*
BOWNE INTEGRATED TYPESETTING SYSTEM
CRC: 10692
Name: NATIONAL GRID
Date: 17-JUN-2008 03:10:51.35Operator: BNY99999TPhone: [phone]Site: BOWNE OF NEW YORK
Y59930.SUB, DocName: EX-15.1, Doc: 16, Page: 128 Description: EXHIBIT 15.1
0/7324.00.00.00Y59930BNY
[E/O] EDGAR 2 *Y59930/324/7*
Table of Contents
136
Notes to the consolidated financial statements continued
National Grid plc
7. Taxation continued
The tax charge for the year after exceptional items, remeasurements and stranded cost recoveries is lower (2007: lower; 2006:
higher) than the standard rate of corporation tax in the UK (30%). The differences are explained below:
Factors that may affect future tax charges
During the year, as a result of the change in the UK corporation tax rate from 30% to 28% that will be effective from 1
April 2008, the UK deferred tax expected to reverse has been measured using the 28% tax rate.
A number of changes to the UK corporation tax system were announced in the March 2008 Budget Statement and are
expected to be enacted in the 2008 Finance Act. These include changes to the industrial building allowance regime. The
changes have not been substantively enacted at the balance sheet date and therefore are not included in these financial
statements. However, the impact of the changes to the industrial building allowance regime is expected to have a £40m tax
char
g
e im
p
act.
Before After Before After Before After
exceptional exceptional exceptional exceptional exceptional exceptional
items, items, items, items, items, items,
remeasurements remeasurements remeasurements remeasurements remeasurements remeasurements
and stranded and stranded and stranded and stranded and stranded and stranded
cost recoveries cost recoveries cost recoveries cost recoveries cost recoveries cost recoveries
2008 2008 2007 2007 2006 2006
£m £m £m £m £m £m
Profit before taxation
Before exceptional items,
remeasurements and stranded cost
recoveries* 1,839 1,839 1,486 1,486 1,369 1,369
Exceptional items, remeasurements
and stranded cost recoveries*
–
353
–
265
–
349
Profit before taxation from continuing
o
p
erations 1,839 2,192 1,486 1,751 1,369 1,718
Profit on continuing operations multiplied
by rate of corporation tax in the UK of
30%
(
2007: 30%; 2006: 30%
)
552 658 446 525 410 515
Effects of:
Adjustments in respect of previous years (60) (49) (53) (109) (16) (12)
Ex
p
enses not deductible for tax
p
ur
p
oses 102 117 44 111 84 108
Non-taxable income
(
75
)
(
51
)
(
61
)
(
154
)
(
178
)
(
180
)
Ad
j
ustment in res
p
ect of forei
g
n tax rates* 26 68 22 70 19 58
Impact of share-based payments 2 2 9 9 (5) (5)
Remeasurement of deferred tax
–
chan
g
e in UK tax rate
–
(
170
)
–
–
–
–
Other 36 36 35
(
11
)
55 51
Total taxation from continuin
g
o
p
erations 583 611 442 441 369 535
% % % % % %
Effective income tax rate 31.7 27.9 29.7 25.2 27.0 31.1
*Comparatives have been adjusted to present items on a basis consistent with the current year classification