Full Annual Report - Inchcape

Section
Three
Financial
statements
8 Tax
Current tax:
– UK corporation tax 8.0 8.0
– Double tax relief (2.2) (11.6)
5.8 (3.6)
Overseas tax 47.5 56.8
53.3 53.2
Adjustments to prior year liabilities:
– UK 8.0 1.0
– Overseas – (1.0)
Current tax 61.3 53.2
Deferred tax (note 16) (17.8) (3.9)
Tax before exceptional tax 43.5 49.3
Exceptional tax – current tax (0.9) (2.4)
Exceptional tax – deferred tax (0.9) 6.0
Exceptional tax (note 2) (1.8) 3.6
Total tax charge 41.7 52.9
The effective tax rate for the year, before exceptional items, of 28.0% (2008 – 25.9%) is higher than the standard rate of tax of 24.8%
(2008 – 20.4%) as explained below. The standard rate comprises the average statutory rates across the Group, weighted in proportion
to accounting profits.
Profit before tax 136.7 108.2
Profit before tax multiplied by the standard rate of tax of 24.8% (2008 – 20.4%) 33.9 22.1
Effects of:
– Exceptional profit on disposal (0.2) –
– Amortisation and impairment 3.2 10.5
– Non-tax deductible items 12.9 5.9
– Unrelieved losses 4.4 9.3
– Prior year items (12.3) (4.4)
– Tax arising on acquisition of non-qualifying tangible fixed assets (0.1) 3.7
– Tax arising on phase out of industrial buildings allowances – 6.0
– Tax impact of share of profit after tax of joint ventures and associates (0.3) (0.3)
– Other items 0.2 0.1
Total tax charge 41.7 52.9
Prior year items include a reduction in UK deferred tax liabilities on properties that are non-qualifying for industrial building purposes,
which were acquired under the Initial Recognition Exemption. A re-assessment of liabilities has led to a reduction of £7.9m. The
remainder of the credits relate to a variety of items in various countries.
The subsidiaries effective tax rate, defined as tax on profit before exceptional items and excluding the Group’s share of profit after tax
of joint ventures and associates, for the year is 28.2% (2008 – 26.0%).
2009
£m
2009
£m
2008
£m
2008
£m
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