BT 2011 Annual Report Download - page 120

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117BT GROUP PLC ANNUAL REPORT & FORM 20-F 2011
FINANCIAL STATEMENTS
FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
10. Taxation
Analysis of taxation (expense) credit for the year
2011 2010 2009
Year ended 31 March £m £m £m
United Kingdom
Corporation tax at 28% (2010: 28%, 2009: 28%) (197) (161) –
Adjustments in respect of prior periods (7) 204 50
Non UK taxation
Current (40) (31) (48)
Adjustments in respect of prior periods 11 – 10
Total current tax (expense) credit (233) 12 12
Deferred tax
Origination and reversal of temporary differences (184) (53) 77
Adjustments in respect of prior periods 32 63 (36)
Impact of change in UK corporation tax rate to 26% 172 – –
Total deferred tax credit 20 10 41
Total taxation (expense) credit (213) 22 53
Factors affecting taxation (expense) credit
The taxation (expense) credit 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:
2011 2010 2009
Year ended 31 March £m % £m % £m %
Profit (loss) before taxation 1,717 1,007 (244)
Expected taxation (expense) credit at UK rate of 28%
(2010: 28%, 2009: 28%) (481) 28.0 (282) 28.0 68 28.0
Effects of:
Non deductible depreciation and amortisation (15) 0.9 (18) 1.7 (27) (11.0)
Non deductible (taxable) non UK losses (profits) (13) 0.8 (26) 2.6 24 9.8
Overseas losses utilised 53 (3.1) 35 (3.4) – –
Higher (lower) taxes on non UK profits (1) – (1) 0.1 9 3.7
Higher (lower) taxes on gain on disposal of business 12 (0.7) – – (4) (1.6)
Other deferred tax assets not recognised (8) 0.4 (17) 1.6 (5) (2.0)
Associates and joint ventures 6 (0.3) 11 (1.1) 21 8.6
Adjustments in respect of prior periods 36 (2.1) 37 (3.7) 24 9.8
Tax credit in respect of settlement of open tax years – – 230 (22.9) – –
Re-measurement of deferred tax balances at 26% 172 (10.0) ––––
Adoption of the amendment to IFRS 2 – – – – (30) (12.3)
Other 26 (1.5) 53 (5.1) (27) (11.1)
Total taxation (expense) credit and effective tax rate (213) 12.4 22 (2.2) 53 21.9
Exclude specific items (note 8) (239) (420) (414)
Total taxation (expense) before specific items and
effective rate on profit before specific items (452) 21.7 (398) 22.9 (361) 24.8
Factors that may affect future tax charges
The rate of UK corporation tax changed from 28% to 26% on 1 April 2011. The UK government has also indicated that it intends to enact
future reductions in the corporation tax rate down to 23% by 1 April 2014.
Tax credit (expense) recognised directly in equity
2011 2010 2009
Year ended 31 March £m £m £m
Deferred tax credit (expense) relating to share-based payments 91 19 (12)
Total taxation credit (expense) recognised directly in equity 91 19 (12)
OVERVIEWBUSINESS REVIEWFINANCIAL REVIEWREPORT OF THE DIRECTORSFINANCIAL STATEMENTSADDITIONAL INFORMATION