Skip to main content

Notes 6-10

7. Taxation

The tax charge is based on the profit for the year and comprises:

  2007
£m		 2006
£m		 2005
£m
Current tax
UK corporation tax at 30%:
Current year 27.5 36.6 32.9
Prior years (57.9) (44.9) (24.4)
  (30.4) (8.3) 8.5
Foreign tax:
Current year 212.9 216.9 177.3
Prior years 5.7 (7.6) 9.9
  218.6 209.3 187.2
Total current tax 188.2 201.0 195.7
Deferred tax
Deferred tax 16.1 (1.6) (1.7)
Tax charge 204.3 199.4 194.0

The tax charge for the year can be reconciled to profit before taxation in the income statement as follows:

  2007
£m		 2006
£m		 2005
£m
Profit before taxation 719.4 682.0 592.0
Tax at the UK corporation tax rate of 30% 215.8 204.6 177.6
Tax effect of share of results of associates (12.4) (12.3) (10.2)
Tax effect of expenses that are not deductible
in determining taxable profit		 9.4 7.4 12.4
Tax effect of utilisation or recognition of
tax losses not previously recognised		 (29.6) (24.3) (16.8)
Effect of different tax rates of subsidiaries
operating in other jurisdictions		 8.6 10.3 18.5
Unused tax losses carried forward 12.5 13.7 12.5
Tax charge 204.3 199.4 194.0
Effective tax rate on profit before taxation 28.4% 29.2% 32.8%
Effective tax rate on Headline PBT1 25.0% 26.0% 29.0%

Note

1 Headline PBT is defined in note 31.