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FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
108 BT GROUP PLC ANNUAL REPORT & FORM 20-F
8. Taxation
Analysis of taxation (credit) expense for the year
2010 2009 2008
Year ended 31 March £m £m £m
United Kingdom
Corporation tax at 28% (2009: 28%, 2008: 30%) 161 – 214
Adjustments in respect of prior periods (204) (50) 18
Non UK taxation
Current 31 48 42
Adjustments in respect of prior periods – (10) (88)
Total current tax (credit) expense (12) (12) 186
Deferred tax
Origination and reversal of temporary differences 53 (77) 78
Adjustments in respect of prior periods (63) 36 (26)
Total deferred tax (credit) expense (10) (41) 52
Total taxation (credit) expense (22) (53) 238
Factors affecting taxation (credit) expense
The taxation (credit) expense on the profit (loss) for the year differs from the amount computed by applying the corporation tax rate to the
profit (loss) before taxation as a result of the following factors:
2010 2009a2008a
Year ended 31 March £m % £m % £m %
Profit (loss) before taxation 1,007 (244) 1,976
Notional taxation expense (credit) at UK rate of 28%
(2009: 28%, 2008: 30%) 282 28.0 (68) 28.0 592 30.0
Effects of:
Non deductible depreciation and amortisation 18 1.7 27 (11.0) 23 1.1
Non deductible (taxable) non UK losses (profits) 26 2.6 (24) 9.8 (7) (0.3)
Overseas losses utilised (35) (3.4) ––––
Higher (lower) taxes on non UK profits 1 0.1 (9) 3.7 7 0.3
Higher (lower) taxes on gain on disposal of non current
investments and group undertakings – – 4 (1.6) – –
Other deferred tax assets not recognised 17 1.6 5 (2.0) (13) (0.6)
Associates and joint ventures (11) (1.1) (21) 8.6 (2) (0.1)
Adjustments in respect of prior periods (37) (3.7) (24) 9.8 (56) (2.8)
Tax credit settlement of open tax years (230) (22.9) – – (40) (2.0)
Re-measurements of deferred tax balances at 28% – – – – (154) (7.8)
Adoption of the amendment to IFRS 2 – – 30 (12.3) – –
Other (53) (5.1) 27 (11.1) (112) (5.8)
Total taxation (credit) expense and effective tax rate (22) (2.2) (53) 21.9 238 12.0
Specific items 342 43 343
Total taxation (credit) expense before specific items
and effective rate on profit before specific items 320 22.0 (10) (7.8) 581 23.2
aRestated. See page 94.