RBS 2012 Annual Report Download - page 388

6 Tax
2012 2011 2010
£m £m £m
Current tax
Charge for the year (495) (168) (321)
(Under)/over provision in respect of prior years (63) 141 31
(558) (27) (290)
Deferred tax
Credit/(charge) for the year 73 (1,158) (737)
Over provision in respect of prior year 16 58 324
Tax charge for the year (469) (1,127) (703)
The actual tax charge differs from the expected tax credit computed by applying the standard rate of UK corporation tax of 24.5% (2011 - 26.5%; 2010 -
28%) as follows:
2012 2011 2010
£m £m £m
Expected tax credit 1,265 315 44
Sovereign debt impairment where no deferred tax asset recognised — (275) —
Other losses in year where no deferred tax asset recognised (511)(530) (450)
Foreign profits taxed at other rates (383) (417) (517)
UK tax rate change impact (1) (149) (112) (83)
Unrecognised timing differences 59 (20)11
Non-deductible goodwill impairment — (24) (3)
Items not allowed for tax
- losses on disposal and write-downs (49) (72)(311)
- UK bank levy (43) (80)—
- regulatory fines (93) — —
- employee share schemes (9) (113) (32)
- other disallowable items (246) (258) (296)
Non-taxable items
- gain on sale of RBS Aviation Capital 26 — —
- gain on sale of Global Merchant Services — 12 221
- gain on redemption of own debt — — 11
- other non-taxable items 104 242 341
Taxable foreign exchange movements (1)4 4
Losses brought forward and utilised 2 2 2
Reduction in carrying value of deferred tax asset in respect of losses in
- Australia (191)— —
- Ireland (203) — —
Adjustments in respect of prior years (2) (47) 199 355
Actual tax charge (469) (1,127) (703)
Notes:
(1) In recent years the UK Government has steadily reduced the rate of UK corporation tax, with the latest enacted rate standing at 23% with effect from 1 April 2013. A further reduction of the rate to
21% with effect from 1 April 2014 was announced on 5 December 2012 but not substantively enacted at the balance sheet date. Accordingly, the closing deferred tax assets and liabilities have been
calculated at 23%.
(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.
386
Notes on the consolidated accounts continued