RBS 2012 Annual Report Download - page 65

RBS GROUP 2012
63
Tax
Managed and Statutory
2012 2011 2010
£m £m £m
Tax charge (469) (1,127) (703)
% % %
UK corporation tax rate 24.5 26.5 28.0
Effective tax rate nm nm nm
nm = not meaningful
The actual tax charge differs from the expected tax credit computed by applying the standard rate of UK corporation tax as follows:
Managed and Statutory
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 (149) (112) (83)
Unrecognised timing differences 59 (20)11
Non-deductible goodwill impairment — (24) (3)
Items not allowed for tax
- losses on disposals 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 (47) 199 355
Actual tax charge (469) (1,127) (703)
2012 compared with 2011 - managed and statutory
The high tax charge in 2012 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), the reduction in the carrying value of
deferred tax assets in Ireland in view of continuing losses, the reduction
in the carrying value of deferred tax assets in Australia following the
strategic changes to the Markets and International Banking businesses
announced in January 2012, and the effect of the two reductions of 1% in
the rate of UK corporation tax enacted in March 2012 and July 2012 on
the net deferred tax balance.
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.