BT 2008 Annual Report Download - page 119

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118 BT Group plc Annual Report & Form 20-F
19. Provisions continued
2008 2007
£m £m
.....................................................................................................................................................................................................................................
Analysed as:
Current 81 100
Non current 265 270
346 370
aProperty provisions mainly comprise the onerous lease provision on rationalisation of the group’s property portfolio. The provisions will be utilised over the remaining lease periods, which range from 1
to 24 years.
bOther provisions include amounts provided for legal or constructive obligations arising from insurance claims and litigation which will be utilised as the obligations are settled. Also included are
amounts provided for the estimated incremental and directly attributable costs arising from the group’s obligation to set up Openreach and deliver the Undertakings, which will be utilised over three
years.
cIncludes specific items of £nil (2007: £64 million) for property rationalisation costs and £53 million (2007: £30 million) relating to the estimated incremental and directly attributable costs arising
from the group’s obligation to set up Openreach and meet the requirements of the Undertakings, see note 4.
dProvisions classified as financial liabilities amounted to £127 million (2007: £146 million) and relate to leasehold property provisions.
20. Deferred taxation
Excess capital
allowances
£m
Retirement
benefit
obligations
£m
Share based
payments
£m
Other
£m
Total
£m
.....................................................................................................................................................................................................................................
At 1 April 2006 1,952 (764) (25) (422) 741
Charge (credit) to income statement 144 223 (33) 75 409
Charge (credit) to equity — 424 (70) 62 416
At 31 March 2007 2,096 (117) (128) (285) 1,566
Deferred tax asset — (117) — — (117)
Deferred tax liability 2,096 — (128) (285) 1,683
At 31 March 2007 2,096 (117) (128) (285) 1,566
Charge to the income statement (except impact of change in tax rate) 10 121 11 64 206
Charge to equity (except impact of change in tax rate) – 768 57 20 845
Impact of change in tax rate (137) 6 9 18 (104)
At 31 March 2008 1,969 778 (51) (183) 2,513
Deferred tax asset –––––
Deferred tax liability 1,969 778 (51) (183) 2,513
At 31 March 2008 1,969 778 (51) (183) 2,513
At 31 March 2008, £nil (2007: £117 million) of the deferred tax asset of £nil (2007: £117 million) is expected to be recovered after
more than twelve months. At 31 March 2008, £2,513 million (2007: £1,683 million) of the deferred tax liability of £2,513 million
(2007: £1,683 million) is expected to be settled after more than twelve months.
A number of changes to the UK corporation tax system were announced in the March 2007 Budget statement which have been
enacted in the 2007 and 2008 Finance Acts. The 2007 financial statements were not impacted as the changes had not been
substantively enacted at the balance sheet date. The effect of the change has been to reduce the value of the deferred tax liability
recognised at 1 April 2007 by £104 million. This comprises a credit of £154 million which has been recognised in the income
statement as a specific item and a charge of £50 million which has been recognised in equity. The decrease in deferred tax is due to
the reduction in the corporation tax rate from 30% to 28% with effect from 1 April 2008.
Consolidated financial statements Notes to the consolidated financial statements