7. Income tax
| All figures in £ millions |
Notes |
2007 |
2006 |
| Current tax |
|
|
|
| Charge in respect of current year |
|
(71) |
(81) |
| Recognition of previously unrecognised trading losses |
|
– |
23 |
| Other adjustments in respect of prior years |
|
27 |
35 |
| Total current tax charge |
|
(44) |
(23) |
| Deferred tax |
|
|
|
| In respect of timing differences |
|
(96) |
(73) |
| Recognition of previously unrecognised capital losses |
|
– |
76 |
| Recognition of previously unrecognised trading losses |
|
– |
37 |
| Other adjustments in respect of prior years |
|
9 |
(21) |
| Total deferred tax (charge)/benefit |
13 |
(87) |
19 |
| Total tax charge |
|
(131) |
(4) |
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 |
2007 |
2006 |
| Profit before tax |
468 |
448 |
| Tax calculated at UK rate |
(141) |
(135) |
| Effect of overseas tax rates |
(25) |
(17) |
| Joint venture and associate income reported net of tax |
7 |
7 |
| Income not subject to tax |
3 |
5 |
| Expenses not deductible for tax purposes |
(12) |
(18) |
| Utilisation of previously unrecognised tax losses |
3 |
7 |
| Recognition of previously unrecognised tax losses |
– |
136 |
| Unutilised tax losses |
(2) |
(3) |
| Prior year adjustments |
36 |
14 |
| Total tax charge |
(131) |
(4) |
| UK |
(42) |
(15) |
| Overseas |
(89) |
11 |
| Total tax charge |
(131) |
(4) |
| Add back: tax benefit on other net gains and losses |
(9) |
(4) |
| Add back: tax benefit on amortisation of acquired intangibles |
(19) |
(10) |
| Add back: tax (benefit)/charge on other finance income |
(6) |
5 |
| Tax amortisation benefit on goodwill and intangibles |
25 |
25 |
| Recognition of tax losses |
– |
(127) |
| Adjusted income tax charge – continuing operations |
(140) |
(115) |
| Adjusted income tax charge – discontinued operations |
(5) |
(15) |
| Total adjusted income tax charge |
(145) |
(130) |
| Tax rate reflected in adjusted earnings |
26.4% |
25.9% |
The tax benefit on items charged to equity is as follows:
| All figures in £ millions |
2007 |
2006 |
| Share-based payments |
7 |
2 |
| Pension contributions and actuarial gains and losses |
28 |
9 |
| Net investment hedges and other foreign exchange gains and losses |
(6) |
1 |
|
29 |
12 |
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