RBS 2011 Annual Report Download - page 61

RBS Group 2011 59
Tax
Managed and Statutory
2011 2010 2009
£m £m £m
Tax (charge)/credit (1,250) (634) 429
%% %
UK corporation tax rate 26.5 28.0 28.0
Effective tax rate nm nm 16.2
nm = not meaningful
The actual tax (charge)/credit differs from the expected tax credit computed by applying the standard rate of UK corporation tax as follows:
Managed and Statutory
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 (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 196 355 (118)
Actual tax (charge)/credit (1,250) (634) 429
2011 compared with 2010 - managed and statutory
The high tax charge in 2011 reflects profits in high tax regimes
(principally US) and losses in low tax regimes (principally Ireland), losses
in overseas subsidiaries for which a deferred tax asset has not been
recognised (principally Ireland and the Netherlands) and the effect of two
reductions of 1% in the rate of UK corporation tax enacted in March 2011
and July 2011 on the net deferred tax balance.
2010 compared with 2009 - managed and statutory
The high tax charge in 2010 reflects profits in high tax regimes and
losses in low tax regimes, together with £450 million relating to losses in
overseas subsidiaries for which a deferred tax asset has not been
recognised, and £311 million mainly in respect of losses on disposal of
businesses for which no tax relief if available. This was offset in part by
the non-taxable gain arising on the disposal of 80.01% of the GMS
business.