Notes to the consolidated financial statements

Analysis of charge for the year

Continuing

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Year to 31 March

 

2010
£m

2009
£m

Current tax:

 

 

In respect of the current year

 

 

– UK

1

– overseas

40

70

Adjustments in respect of previous years

(2)

(14)

Exceptional tax credit

(15)

 

24

56

Deferred tax credit

(108)

(37)

Income tax (credit)/expense

(84)

19

The income tax credit relating to continuing operations in the year to 31 March 2010 of £84 million (2009 – expense of £19 million) includes a credit of £112 million in respect of exceptional items (2009 – £44 million).

The exceptional tax credit of £15 million represents releases of various tax provisions following settlement of outstanding issues around the Group.

The effective tax rate for the year, calculated on the basis of the total income tax credit relating to continuing operations as a proportion of loss before tax, is 137.7% (2009 – income tax expense on profit before tax of 16.8%). This compares with the standard rate of corporation tax in the UK of 28% (2009 – 28%).

Discontinued

The income tax expense in respect of discontinued operations (Note 12) in the year to 31 March 2010 is £nil million (2009 – £1 million).

Continuing

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Year to 31 March

 

2010
£m

2009
£m

(Loss)/profit before tax

(61)

113

Corporation tax (credit)/charge thereon at 28% (2009 – 28%)

(17)

32

Adjusted for the effects of:

 

 

– exceptional tax credit

(15)

– (income not taxable)/expenses not deductible for tax purposes

(2)

2

– losses not recognised

19

29

– adjustments to tax in respect of previous periods

(2)

(7)

– different tax rates applied on overseas earnings

(67)

(37)

Total

(84)

19

The effective tax rate relating to continuing operations on profit before exceptional items, amortisation and exceptional tax items is 20.4% (2009 – 27.3%).

Tax credit/(charge) relating to components
of other comprehensive income

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Year to 31 March

 

2010
£m

2009
£m

Retirement benefit obligations

29

31

Cash flow hedges

(4)

9

Available for sale financial assets

Tax credit relating to components of other comprehensive income

25

40

Current tax

Deferred tax (Note 29)

25

40

Tax on items recognised directly in equity

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Year to 31 March

 

2010
£m

2009
£m

Deferred tax (credit)/charge on share-based payments

(1)

4

Total

(1)

4