Notes to the consolidated financial statements

Deferred tax is calculated in full on temporary differences using tax rates applicable in the jurisdictions where such differences arise. Movements in deferred income tax net liabilities/(assets) in the year are as follows:

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Deferred tax

£m

At 1 April 2008

106

Credited to income

(39)

Credited to statement of comprehensive income

(40)

Charged directly to equity

4

Exchange differences

17

At 31 March 2009

48

Credited to income

(108)

Credited to statement of comprehensive income

(25)

Credited directly to equity

(1)

Exchange differences

2

At 31 March 2010

(84)

Of the amounts of deferred tax credited to income and equity, £0.3 million (2009 – £1 million) arises from changes in tax rates. There was no impact from the imposition of new taxes.

Deferred tax assets in respect of unutilised tax losses of £371 million (2009 – £293 million) have not been recognised to the extent that they exceed taxable profits against which these assets may be recovered. No unrelieved tax losses expired under current tax legislation in the year ended 31 March 2010.

The total deferred tax on unremitted earnings is £3.3 million of which £0.6 million has been recognised. The Group has not recognised the remaining amount as it is able to control the timing of the reversal of these temporary differences and it is probable that they will not reverse in the foreseeable future.

The aggregate amount of temporary differences arising from unremitted profits at the balance sheet date was approximately £2.7 million (2009 – £1.1 billion). The reduction in temporary differences was due to the introduction of the UK dividend exemption regime on 1 July 2009.

The movements in deferred tax assets and liabilities during the period are as follows:

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Deferred tax liabilities

Capital allowances in excess of depreciation
£m

Other
£m

Total
£m

At 1 April 2008

126

47

173

Transfers between categories

(21)

(3)

(24)

(Credited)/charged to income

(32)

1

(31)

Exchange differences

29

9

38

At 31 March 2009

102

54

156

Transfers between categories

(2)

(2)

Credited to income

(94)

(25)

(119)

Exchange differences

(1)

(4)

(5)

At 31 March 2010

7

23

30

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Deferred tax assets

Retirement benefit obligations
£m

Share-based payments
£m

Tax losses
£m

Other
£m

Total
£m

At 1 April 2008

35

4

2

26

67

Transfers between categories

(2)

(2)

(20)

(24)

(Charged)/credited to income

(4)

2

10

8

Credited to statement of comprehensive income

31

9

40

Charged to equity

(4)

(4)

Exchange differences

21

21

At 31 March 2009

81

2

25

108

Transfers between categories

(2)

(2)

(Charged)/credited to income

(10)

(1)

4

(4)

(11)

Credited to statement of comprehensive income

29

(4)

25

Credited to equity

1

1

Exchange differences

(6)

(1)

(7)

At 31 March 2010

94

2

4

14

114

Deferred tax assets and liabilities are offset where there is a legally enforceable right of offset and there is an intention to settle the balances net.

As a result of these offsets, the deferred tax balances are presented in the statement of financial position as follows:

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31 March

 

2010
£m

2009
£m

Deferred tax liabilities

59

78

Deferred tax assets

(143)

(30)

Total

(84)

48