Vodafone 2005 Annual Report Download - page 94

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Notes to the Consolidated Financial Statements continued
92 |Financials
8. Tax on loss on ordinary activities continued
Factors affecting the tax charge for the year
Refer to Operating and Financial Review and Prospects – Operating Results – Group Overview – 2005 financial year compared to 2004 financial year – Taxation.
Reconciliation of expected tax charge using the standard tax rate to the actual current tax charge
The differences between the Group’s expected tax charge, using the Group’s standard corporation tax rate of 36.0% in 2005 (36.4% in 2004 and 37.0% in 2003),
comprising the average rates of tax payable across the Group and weighted in proportion to accounting profits, and the Group’s current tax charge for each of those years
were as follows:
2005 2004 2003
£m £m £m
Expected tax credit at standard tax rate on loss on ordinary activities (1,693) (1,837) (2,295)
Goodwill amortisation 5,292 5,535 5,196
Exceptional non-operating items (5) 38 2
Exceptional operating items 113 (83) 213
Expected tax charge at standard tax rate on profit on ordinary activities,
before goodwill amortisation and exceptional items 3,707 3,653 3,116
Permanent differences 93 47 140
Fixed asset timing differences 12 (509) (404)
Short term timing differences (163) (18) (64)
Deferred tax on overseas earnings (322) (418) (424)
Losses carried forward utilised/current year losses for which no credit taken (171) 26 278
Exceptional current tax credit (166) ––
Prior year adjustments (289) (61) 4
Non taxable profits/non deductible losses (148) (281) (239)
International corporate tax rate differentials and other (73) (125) (232)
Actual current tax charge (excluding tax on exceptional items) 2,480 2,314 2,175
Reconciliation of expected tax charge using the UK statutory tax rate to the actual tax charge
The differences between the Group’s expected tax charge, using the UK corporation tax rate of 30% in 2005, 2004 and 2003 and the Group’s tax charge for each of those
years were as follows:
2005 2004 2003
£m £m £m
Expected tax credit at UK corporation tax rate on loss on ordinary activities (1,411) (1,514) (1,863)
Goodwill amortisation 4,410 4,562 4,217
Exceptional non-operating items (4) 31 2
Exceptional operating items 95 (69) 173
Expected tax charge at UK corporation tax rate, before goodwill amortisation and exceptional items 3,090 3,010 2,529
Permanent differences 118 152 165
Movement in valuation allowances against:
– Fixed asset timing differences (22) (21) (40)
– Short term timing differences (197) (64) 60
– Losses carried forward utilised/current year losses for which no credit taken (264) (26) 161
Prior year adjustments (315) (61) (9)
Net (over)/under charge relating to international associated undertakings 23 (186) 8
Non taxable profits/non deductible losses (148) (281) (239)
International corporate tax rate differentials and other 547 527 358
Actual total tax charge (excluding tax on exceptional items and exceptional tax credit) 2,832 3,050 2,993