Tesco 2008 Annual Report Download - page 61

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Tesco PLC Annual Report and
Financial Statements 2008 59
Note 6 Taxation continued
Deferred tax
The following are the major deferred tax assets/(liabilities) recognised by the Group and movements thereon during the current and prior year:
Accelerated Retirement Short-term Other pre/post
tax benefit Share-based timing IAS 32 and tax temporary
depreciation obligation payments differences Tax losses IAS 39 differences Total
£m £m £m £m £m £m £m £m
At 25 February 2006 (839) 364 105 32 8 22 – (308)
(Charge)/credit to the Group Income Statement (193) (46) (16) 17 (1) (1) – (240)
(Charge)/credit to equity – (34) 47––––13
Acquisition of subsidiaries 9 – – 3 17 – – 29
Foreign exchange differences 4 – – (1) – – – 3
At 24 February 2007 (1,019) 284 136 51 24 21 – (503)
(Charge)/credit to the Group Income Statement (83) 22 (3) (2) (13) (8) 11 (76)
Charge to equity – (75) (57) ––––(132)
Acquisition of subsidiaries (18) ––––––(18)
Foreign exchange differences 52 2 – (24) 1 – – 31
At 23 February 2008 (1,068) 233 76 25 12 13 11 (698)
Certain deferred tax assets and liabilities have been offset. The following is the analysis of the deferred tax balances (after offset) for financial
reporting purposes:
2008 2007
£m £m
Deferred tax assets 104 32
Deferred tax liabilities (802) (535)
(698) (503)
No deferred tax is recognised on the unremitted earnings of overseas subsidiaries and joint ventures, because the earnings are continually reinvested by
the Group and no tax is expected to be payable on them in the foreseeable future. The temporary difference unrecognised at the year end amounted to
£1,053m (2007 – £565m).
Unrecognised deferred tax assets
Deferred tax assets have not been recognised in respect of the following items, because it is not probable that future taxable profits will be available
against which the Group can utilise the benefits.
2008 2007
£m £m
Deductible temporary differences 21
Tax losses 38 12
40 13
At the Balance Sheet date, the Group has unused trading tax losses of £146m (2007 – £131m) available for offset against future profits. A deferred tax
asset has been recognised in respect of £9m (2007 – £98m) of such losses. No deferred tax asset has been recognised in respect of the remaining £137m
(2007 – £33m) due to the unpredictability of future profit streams. Included in unrecognised tax losses are losses of £39m (2007 – £10m in 2011) that will
expire in 2012 and £57m (2007 – £22m in 2027) that will expire in 2028. Other losses will be carried forward indefinitely.
In addition, the Group has UK capital losses of £350m, which were agreed with HMRC during the year.