Notes to the consolidated financial statements
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7. Income tax
All figures in £ millions | Notes | 2009 | 2008 |
---|---|---|---|
Current tax | |||
Charge in respect of current year | (156) | (89) | |
Other adjustments in respect of prior years | 9 | 10 | |
Total current tax charge | (147) | (79) | |
Deferred tax | |||
In respect of temporary differences | (55) | (97) | |
Other adjustments in respect of prior years | 4 | 4 | |
Total deferred tax charge | 13 | (51) | (93) |
Total tax charge | (198) | (172) |
The tax on the Group's profit before tax differs from the theoretical amount that would arise using the UK tax rate as follows:
All figures in £ millions | 2009 | 2008 |
---|---|---|
Profit before tax | 660 | 585 |
Tax calculated at UK rate (2009: 28%, 2008: 28.5%) | (185) | (167) |
Effect of overseas tax rates | (40) | (23) |
Joint venture and associate income reported net of tax | 8 | 7 |
Net income/(expense) not subject to tax | 5 | (7) |
Utilisation of previously unrecognised tax losses | 2 | 4 |
Unutilised tax losses | (1) | – |
Prior year adjustments | 13 | 14 |
Total tax charge | (198) | (172) |
UK | (43) | (53) |
Overseas | (155) | (119) |
Total tax charge | (198) | (172) |
Tax rate reflected in earnings | 30.0% | 29.4% |
The tax rate reflected in adjusted earnings is calculated as follows:
All figures in £ millions | 2009 | 2008 |
---|---|---|
Profit before tax | 660 | 585 |
Adjustments: | ||
Amortisation of acquired intangibles | 103 | 86 |
Other net finance (income)/costs | (2) | 3 |
Adjusted profit before tax – continuing operations | 761 | 674 |
Adjusted profit before tax – discontinued operations | – | – |
Total adjusted profit before tax | 761 | 674 |
Total tax charge | (198) | (172) |
Adjustments: | ||
Tax benefit on other net gains and losses | – | (7) |
Tax benefit on amortisation of acquired intangibles | (37) | (31) |
Tax charge/(benefit) on other finance income | 1 | (1) |
Tax amortisation benefit on goodwill and intangibles | 40 | 33 |
Adjusted income tax charge – continuing operations | (194) | (178) |
Adjusted income tax charge – discontinued operations | – | – |
Total adjusted income tax charge | (194) | (178) |
Tax rate reflected in adjusted earnings | 25.5% | 26.4% |
The tax benefit/(charge) recognised in other comprehensive income is as follows:
All figures in £ millions | 2009 | 2008 |
---|---|---|
Pension contributions and actuarial gains and losses | 79 | 10 |
Net investment hedges and other foreign exchange gains and losses | 12 | (1) |
91 | 9 |
A tax benefit of £6m (2008: tax charge £7m) relating to share- based payments has been recognised directly in equity.