RBS 2011 Annual Report Download - page 340

338 RBS Group 2011
6 Tax
2011 2010 2009
£m £m £m
Current tax
Charge for the year (338) (251) (494)
Over provision in respect of prior periods 137 41 191
(201) (210) (303)
Deferred tax
(Charge)/credit for the year (1,108) (738) 1,041
Over/(under) provision in respect of prior periods 59 314 (309)
Tax (charge)/credit for the year (1,250) (634) 429
The actual tax (charge)/credit differs from the expected tax credit computed by applying the standard rate of UK corporation tax of 26.5% (2010 and
2009 - 28%) as follows:
2011 2010 2009
£m £m £m
Expected tax credit 203 112 741
Sovereign debt impairment where no deferred tax asset recognised (275) — —
Other losses in year where no deferred tax asset recognised (530) (450) (780)
Foreign profits taxed at other rates (417) (517) (276)
UK tax rate change - deferred tax impact (1) (110) (82) —
Unrecognised timing differences (20) 11 274
Non-deductible goodwill impairment (24) (3) (102)
Items not allowed for tax
- losses on strategic disposals and write-downs (72) (311) (152)
- UK bank levy (80) — —
-employee share schemes (113) (32) (29)
- other disallowable items (271) (296) (327)
Non-taxable items
-gain on sale of Global Merchant Services 12 221 —
- gain on redemption of own debt — 11 693
- other non-taxable items 245 341 410
Taxable foreign exchange movements 4 4 1
Losses brought forward and utilised 22 94
Adjustments in respect of prior years (2) 196 355 (118)
Actual tax (charge)/credit (1,250) (634) 429
Notes:
(1) In the Budget on 22 June 2010, the UK Government proposed, amongst other things, to reduce Corporation Tax rates in four annual decrements of 1% with effect from 1 April 2011. An additional 1%
decrement was announced by the UK Government in the Budget on 23 March 2011. The first decrement was enacted on 27 July 2010, the second on 29 March 2011 and the third on 5 July
2011. Existing temporary differences may therefore unwind in periods subject to these reduced tax rates. Accordingly, the closing deferred tax assets and liabilities have been calculated at the rate
of 25%.
(2) Prior year tax adjustments include releases of tax provisions in respect of structured transactions and investment disposals, and adjustments to reflect submitted tax computations in the UK and
overseas.
Notes on the consolidated accounts continued