BT 2005 Annual Report Download - page 87

8. Interest payable 2005
£m
2004
£m
2003
£m
Interest payable and similar charges in respect of:
Bank loans and overdrafts 71 87 82
Interest payable on finance leases 58 19 –
Other borrowings
ab
914 1,114 1,527
Group 1,043 1,220 1,609
Joint ventures 23 19 17
Associates ––8
Total interest payable 1,066 1,239 1,634
a
Includes an exceptional charge of £89 million in the year ended 31 March 2004 being the premium on repurchasing £813 million of the group’s issued
bonds.
b
Includes an exceptional charge of £293 million in the year ended 31 March 2003 on the termination of interest rate swap agreements following the
receipt of the Cegetel sale proceeds.
9. Tax on profit (loss) on ordinary activities 2005
£m
2004
£m
2003
£m
United Kingdom:
Corporation tax at 30% 542 328 447
Prior year adjustments 4–12
Non-UK taxation:
Current (4) 37 47
Taxation on the group’s share of results of associates and joint ventures 1–81
Prior year adjustments (3) – (26)
Total current taxation 540 365 561
Deferred taxation (credit) charge at 30%
Origination and reversal of timing differences (18) 184 (29)
Prior year adjustments 1(10) (73)
Total deferred taxation (17) 174 (102)
Total tax on profit (loss) on ordinary activities 523 539 459
The tax credit relating to exceptional items is £16 million (2004 – £29 million, 2003 – £139 million).
A tax charge on recognised gains and losses not included in the profit and loss account of £7 million
(2004 – £47 million, 2003 – £16 million) related to exchange movements offset in reserves.
Current tax and total tax on profit on ordinary activities, differs from the amount computed by applying
the corporation tax rate to profit on ordinary activities before taxation. The differences were attributable to
the following factors:
2005
%
2004
%
2003
%
UK corporation tax rate 30.0 30.0 30.0
Non-deductible depreciation, amortisation and impairment 0.2 0.9 0.4
Non-deductible non-UK losses 1.6 1.6 3.3
(Lower) higher taxes on non-UK profits (0.6) 0.2 0.4
Excess depreciation over capital allowances –3.2 3.4
Pension provisions and prepayments 0.7 (9.9) (3.2)
Other timing differences 0.1 (2.8) 0.7
Lower effective tax on gain on disposal of fixed asset
investments and group undertakings (4.6) (1.3) (16.5)
Higher effective tax on gain on disposal of non qualifying assets –– 2.0
Prior year adjustments 0.1 – (2.0)
Other (4.4) (3.2) (0.8)
Current tax – effective corporation tax rate 23.1 18.7 17.7
Deferred taxes on excess depreciation over capital allowances –(3.2) (3.4)
Pension provisions and prepayments (0.7) 9.9 3.2
Other timing differences (0.1) 2.8 (0.7)
Prior year adjustments –(0.5) (2.3)
Total tax – effective corporation tax rate 22.3 27.7 14.5
Factors that may affect future tax charges
The group operates in countries where the tax rate is different to the UK corporate tax rate, primarily the USA, the
Netherlands, the Republic of Ireland, Germany and Spain.
As at 31 March 2005, the group had overseas corporate tax losses estimated to be £1 billion which are not
recognised as deferred tax assets. In addition, the group has unutilised capital losses estimated to be in excess
of £10 billion which were not recognised as deferred tax assets.
86 BT Group plc Annual Report and Form 20-F 2005 Notes to the financial statements