Peachtree 2015 Annual Report Download - page 125
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The Sage Group plc | Annual Report & Accounts 2015 123
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORT
4 Income tax expense
This note analyses the tax charge for this financial year which includes both current and deferred tax. Current tax expense represents
the amount payable on this year’s taxable profits and any adjustments relating to prior years. Deferred tax is an accounting adjustment
to provide tax that is expected to arise in the future due to differences between accounting and tax bases.
This note outlines the tax accounting policies, the current and deferred tax charges in the year and presents a reconciliation of profit
before tax in the income statement to the tax charge.
Accounting policy
The taxation charge for the year represents the sum of the tax currently payable and deferred tax. The charge is recognised in the
income statement and statement of comprehensive income according to the accounting treatment of the related transaction.
Current tax payable or receivable is based on the taxable income for the period and any adjustment in respect of prior periods.
Current tax is calculated using tax rates that have been enacted or substantively enacted at the end of the reporting period.
Deferred tax arises due to certain temporary differences between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases (note 11).
Analysis of charge in the year Note
2015
£m
2014
£m
Current tax
– Current tax on profit for the year 106.9 101.4
– Adjustment in respect of prior years (11.0) (4.2)
Current tax 95.9 97.2
Deferred tax
– Origination and reversal of temporary differences (13.9) (5.3)
– Adjustment in respect of prior years (0.5) (2.1)
Deferred tax 11 (14.4) (7.4)
The current year tax charge is split into the following:
Underlying tax charge 90.3 90.5
Tax credit on adjustments between the underlying and statutory operating profit (8.8) (0.7)
Income tax expense 81.5 89.8
The majority of the current tax adjustment in respect of prior years of £11.0m (2014: £4.2m) reflects the resolution of a number of historical
tax matters, including settlements with the Tax Authorities.
2015
£m
2014
£m
Tax on items credited to other comprehensive income
Deferred tax credit on actuarial loss on post-employment benefit obligations (0.6) (0.4)
Total tax on items credited to other comprehensive income/equity (0.6) (0.4)