Vodafone 2006 Annual Report Download - page 87

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Vodafone Group Plc Annual Report 2006 85
6. Taxation
(Loss)/profit before tax is split as follows:
2006 2005
£m £m
United Kingdom profit before tax 491 765
Overseas (loss)/profit before tax (15,344) 6,520
Total (loss)/profit before tax (14,853) 7,285
Income tax expense
Tax on (loss)/profit from continuing operations, as shown in the income statement, is as follows:
2006 2005
£m £m
United Kingdom corporation tax expense/(income) at 30%:
Current year 169 339
Adjustments in respect of prior years (15) (79)
154 260
Overseas current tax expense/(income):
Current year 2,077 1,774
Adjustments in respect of prior years (418) (154)
1,659 1,620
Total current tax expense 1,813 1,880
Deferred tax on origination and reversal of temporary differences:
United Kingdom deferred tax 444 234
Overseas deferred tax 123 (245)
Total deferred tax expense/(income) 567 (11)
Total tax on (loss)/profit from continuing operations 2,380 1,869
Tax recognised directly in equity 2006 2005
£m £m
Current tax credit (6) (10)
Deferred tax credit (11) (35)
Total tax credited directly to equity (17) (45)
Factors affecting tax expense for the year
The table below explains the differences between the expected tax expense on continuing operations, at the UK statutory tax rate of 30% for 2006 and 2005, and the Group’s total
tax expense for each year. Further discussion of the current year tax expense can be found in the section titled “Performance – Operating Results – Group Overview – 2006 financial
year compared to 2005 financial year – Taxation.”
2006 2005
£m £m
(Loss)/profit before tax on continuing operations as shown in the income statement (14,853) 7,285
Expected tax (credit)/ charge on profit from continuing operations at UK statutory tax rate (4,456) 2,186
Effect of taxation of associated undertakings, reported within operating profit 133 134
Non deductible impairment losses 7,055 143
Expected tax charge at UK statutory rate on profit from continuing operations, before impairment losses and taxation of associates 2,732 2,463
Effect of different statutory tax rates of overseas jurisdictions 411 433
Other expenses not deductible for tax purposes 299 367
Deferred tax on overseas earnings (78) (66)
Effect of previously unrecognised temporary differences (71) (463)
Prior period adjustments (470) (417)
Exclude taxation of associated undertakings (443) (448)
Total tax expense on (loss)/profit from continuing operations 2,380 1,869
Financials