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6. Taxation continued
Tax charged/(credited) to other comprehensive income and equity
2014
£m
2013
(restated)1
£m
2012
(restated)1
£m
Current tax
Share-based payment (3) 1(3)
Available-for-sale investments (5) – –
Deferred tax
Available-for-sale investments 22 2
Cash flow hedges 513 (2)
Share-based payment (4) 1 –
Remeasurements of net retirement benefit obligations 172 (179) (342)
167 (162) (345)
Total tax recognised in the statement of comprehensive income 174 (164) (342)
Total tax relating to share-based payment recognised directly in equity (7) 2(3)
167 (162) (345)
1. See note 1 on page 92.
The tax charge for the year after exceptional items, remeasurements and stranded cost recoveries is lower (2013: lower; 2012: lower)
than the standard rate of corporation tax in the UK of 23% (2013: 24%; 2012: 26%).
Before
exceptional
items,
remeasurements
and stranded
cost recoveries
2014
£m
After
exceptional
items,
remeasurements
and stranded
cost recoveries
2014
£m
Before
exceptional
items,
remeasurements
and stranded
cost recoveries
2013
(restated)1
£m
After
exceptional
items,
remeasurements
and stranded
cost recoveries
2013
(restated)1
£m
Before
exceptional
items,
remeasurements
and stranded
cost recoveries
2012
(restated)1
£m
After
exceptional
items,
remeasurements
and stranded
cost recoveries
2012
(restated)1
£m
Profit before tax
Before exceptional items, remeasurements
andstranded cost recoveries 2,584 2,584 2,533 2,533 2,408 2,408
Exceptional items, remeasurements and
stranded cost recoveries –164 –178 –(26)
Profit before tax 2,584 2,748 2,533 2,711 2,408 2,382
Profit before tax multiplied by UK corporation
taxrate of 23% (2013: 24%; 2012: 26%) 594 632 608 651 626 619
Effect of:
Adjustments in respect of prior years (109) (109) (116) (117 ) 1 –
Expenses not deductible for tax purposes 32 284 37 169 36 55
Non-taxable income (24) (268) (24) (152) (19) (30)
Adjustment in respect of foreign tax rates 98 138 116 140 63 63
Impact of share-based payment (3) (3) 2 2 1 1
Deferred tax impact of change in UK and
UStax rates – (390) –(128) –(242)
Other (7) –(4) (8) (11) (3)
Total tax 581 284 619 557 697 463
% % % % % %
Effective tax rate 22.5 10.3 24.4 20.5 28.9 19.4
1. See note 1 on page 92.
Factors that may affect future tax charges
The Finance Act 2013 (the Act) was substantively enacted on 2 July 2013. The Act further reduced the main rate of UK corporation tax to
21% with effect from 1 April 2014 and 20% from 1 April 2015.
The reduction in the UK corporation tax rate to 20% from 1 April 2015 has been enacted and deferred tax balances have been calculated
at this rate.
Effective from 1 April 2014, the state income tax rate for Massachusetts regulated utilities increased from 6.5% to 8% and, effective from
1 April 2016, the state income tax rate for New York will decrease from 7.1% to 6.5%. Neither of these rate changes is expected to have a
material impact on the Group’s effective tax rate.
Notes to the consolidated
financial statements continued
104 National Grid Annual Report and Accounts 2013/14