RBS 2009 Annual Report Download - page 87

85RBS Group Annual Report and Accounts 2009
Taxation Pro forma Statutory
2009 2008 2009 2008
£m £m £m £m
Tax credit 339 1,280 371 2,323
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UK corporation tax rate 28.0 28.5 28.0 28.5
Effective tax rate 17.6 15.4 14.3 5.7
The actual tax credit differs from the expected tax credit computed by applying the standard rate of UK corporation tax as follows:
Pro forma Statutory
2009 2008 2009 2008
£m £m £m £m
Expected tax credit 540 2,364 727 11,638
Non-deductible goodwill impairment ——(102) (8,292)
Unrecognised timing differences 274 (274) 274 (274)
Other non-deductible items (508) (371) (508) (378)
Non-taxable items:
– gain on redemption of own debt 693 —693 —
– other 410 491 410 491
Taxable foreign exchange movements 1(80) 1(80)
Foreign profits taxed at other rates (332) (271) (320) (203)
Losses in year not recognised (715) (942) (780) (942)
Losses brought forward and utilised 94 11 94 11
Adjustments in respect of prior periods (118) 352 (118) 352
Actual tax credit 339 1,280 371 2,323
On a statutory basis, the effective tax rate for the year was 14.3% (2008 – 5.7%). The tax credit is lower than that arising from applying the standard
rate of UK corporation tax of 28% to the loss for the period, principally due to certain carried forward losses on which no tax relief has been
recognised. The effective tax rate on a pro forma basis was 17.6% (2008 – 15.4%).
Business review
Additional disclosures on these and other related exposures can be found in the following sections:
Disclosure Section Sub-section Page
Further analysis of credit market exposures (1) Risk and capital management Market turmoil exposures 184
Valuation aspects Financial statements Note 11 Financial instruments 278
Financial statements Critical accounting policies 256
Reclassification of financial instruments Financial statements Note 11 Financial instruments 275