Notes to the Accounts For the year ended 31 December 2007
6. Taxation on profits on ordinary activities
The charge for taxation is based on the annual tax rate of 31.0% on profit before tax (2006: 32.5%).
Analysis of charge in year 2007
| 2007 £'000 |
2006 £'000 |
|
|---|---|---|
| UK income tax at 30% for year | 22,518 | 17,694 |
| Adjustments in respect of prior periods | (1,141) | 1,228 |
| Overseas income tax | 23,866 | 14,515 |
| 45,243 | 33,437 | |
| Deferred tax expense | ||
| Origination and reversal of temporary differences | (1,228) | (1,168) |
| Reduction in tax rate | (16) | 31 |
| Charge/(benefit) of tax losses recognised | 1,708 | (788) |
| Deferred tax expense | 464 | (1,925) |
| Total income tax expense in the income statement | 45,707 | 31,512 |
Reconciliation of effective tax rate
| 2007 £'000 |
% | 2006 £'000 |
% | |
|---|---|---|---|---|
| Profit before taxation | 147,441 | 96,959 | ||
| Profit on ordinary activities before tax multiplied by the standard rate of corporation tax in the UK | 44,232 | 30.0 | 29,088 | 30.0 |
| Effects of: | ||||
| Disallowable items and other permanent timing differences | 715 | 0.5 | 594 | 0.6 |
| Unrelieved overseas losses | 416 | 0.3 | 361 | 0.4 |
| Utilisation of losses not previously recognised | – | – | (191) | (0.2) |
| Recognition of further losses not previously recognised | – | – | (948) | (1.0) |
| Higher tax rates on overseas earnings | 1,485 | 1.0 | 1,637 | 1.7 |
| Adjustment to tax charge in respect of prior periods | (1,141) | (0.8) | 971 | 1.0 |
| Tax expense and effective rate for the year | 45,707 | 31.0 | 31,512 | 32.5 |
| Tax recognised directly in equity | 2007 £'000 |
2006 £'000 |
|---|---|---|
| Relating to equity settled transactions | 833 | (8,302) |